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Mick100
05-02-2005, 09:01 PM
Interview with Jim Rodgers on FSO


http://www.financialsense.com/Experts/2005/Rogers.html

stolwyk
05-02-2005, 09:36 PM
I believe this tread should do well; thanks for introducing this subject. It will fill an important gap.

Cheers,

Gerry

Mick100
07-02-2005, 10:18 PM
Printer Friendly Version Email this Article








SILVER - Investment Opportunity of the Decade

Richard Greene

The environment for investment opportunities is, right now, in the process of undergoing a radical change that only a relative handful of investors has come to recognize. A vastly greater number of people believe they are going to become wealthy over the next decade by investing in technology stocks, rather than in the areas we have targeted. When all is said and done at the end of the next decade, we believe silver and silver stocks will have been by far the best performing asset classes on the planet.

First, we think it is appropriate to view the historic bear market that has unfolded since (not 1980 as many believe when silver hit $50, but) 1477 when silver hit an equivalent $806 per ounce!

www.goldinfo.net/silver600.html

When one views this stunning chart (see above link), it is most amazing that for one to appreciate the investment merits of silver, it is not even necessary to rely on silver returning to its historic role as money, although that would truly be the icing on the cake.

Silver is an industrial metal whose price has fallen so low that only a handful of primary silver producers are efficient enough to produce silver profitably. Much of the world's silver production today is produced as a byproduct of gold, copper, lead, and zinc. Many market observers are dumbfounded and question why these producers would continue to sell their product into the market at a loss. Some observers, most notably Jason Hommel and Ted Butler have prodded managements to do the opposite, by either withholding their production or using their excess cash to buy silver. In light of the increasingly rapid money creation, this appears to be a brilliant strategy. Silver Standard (SSRI) has lead the way by purchasing silver on the open market, and Nevada Pacific Gold (NPG) - Toronto is another producer that has announced it will withhold some production.

The truth of the matter is that supply is rapidly drying up. The US Government had a 60-year stockpile of silver that has been completely depleted. There has been a supply deficit in silver for 15 years running and this year the deficit could be as high as 50 million ounces. It is uncertain how or if this deficit will be filled. Whereas 95% of the gold that has been mined still exists, estimates run that only between 250 and 650 million ounces of the silver that has been mined is still in existence, excluding silver jewelry. This means that there is probably as much as seven times as much gold still in existence as silver. In addition, silver is incredibly cheap relative to gold. The long run price of gold to price of silver ratio has been about 16 to 1. Currently, the ratio exceeds 60 to 1 which suggests that silver should appreciate several times the rate of appreciation of gold. The reason this could be explosive is there are a multitude of commercial uses for silver that are difficult if not impossible to replace. Much is made of the replacement of traditional photography with digital photography and its bearish implications for silver usage. Realistically, a good portion of the world's population does not own a computer and in the huge population centers such as China and India, it is much more likely that growth will be seen from these countries in the traditional photography area which uses silver. Silver's unusual chemical properties ensure increased demand in high technology and medical markets which make up 40% of demand. Among its most important properties: it is superconductive, highly reflective, malleable, ductile, it endures extreme temperature ranges, and has electrically low contact resistance. While demand from these areas alone are enough to make the silver story an exciting investment theme, the real home run is if silver returns to its more traditional role in history as money. Incredibly, while not given much publicity this is already happening in at least two US states.

We feel strongly that paper

Packersoldkidney
07-02-2005, 10:25 PM
http://www.theage.com.au/news/Business/Asia-fuels-global-resources-boom/2005/01/12/1105423556573.html

Mick100
08-02-2005, 07:58 PM
TANTALUM

Tantalum is a rare, grey-blue metal used primarily in the electronics industry in the manufacture of capacitors, devices that regulate the flow of electricity within electronic circuits. Tantalum has a number of properties that make it a valuable commodity, including:
High Boiling Point (5,425°C)
High Melting Point (2,997°C)
Resistance to corrosion
Ductile ie it alloys well
Superconductivity
Low co-efficient of thermal expansion
High co-efficient of capacitance (capacity to store and release a charge)


Tantalum Applications

The electronics industry is the largest single consumer of tantalum; it is primarily used in the manufacture of capacitors, devices that regulate the flow of electricity within an integrated circuit. Tantalum capacitors are found in many every day devices such as mobile phones, lap top computers and video cameras. Another increasing application for tantalum is as an alloy in the manufacture of turbine blades for power stations and jet engines, where tantalum improves the structural integrity of blades at high temperatures, enabling turbines to operate at higher temperatures, thereby improving fuel efficiency.

History of Tantalum
Geologically tantalum often occurs with tin and until relatively recently, tantalum was regarded as an impurity that attracted penalties to the tin price. Tin was historically produced via dredge operations, mainly in SE Asia, that resulted in large, often high tantalum grade bearing tin slags. Historically, tin slags were the largest source of tantalum, today however, these slags are depleted and they are a less important source of tantalum. Tantalum supply is now dominated by hard rock sources where tantalum is the primary metal of interest.

Tantalum Demand
There is little public information on the tantalum market and tantalum pricing. The Tantalum Institute (“TIC”) is an organisation of many of the world’s tantalum producers, traders and users whose objective is to collect and distribute information on tantalum to its members. Until recently the TIC collected, on a confidential basis, information on the purchases, sales and applications of tantalum from its members and then published that information in a bi-annual bulletin.

These TIC statistics showed that tantalum demand rose steadily from just under 3 million lbs of tantalum in 1993 to over 6 million lbs of tantalum in 2000. The increase in demand was largely driven by the electronics sector, where demand for high performance and miniature electronic goods, such as mobile phones and personal organisers, made its properties particularly attractive. In 2001, as a result of the global economic slow down, demand fell quite dramatically to 1999 levels of approximately 4 million lbs tantalum. Unfortunately in 2002, for legal reasons, one of the world’s largest refiners of tantalum decided to no longer supply this information, so even this limited source of information is now no longer available.

Tantalum Market
Unlike many of the more common metals such as copper and nickel there is no central market for tantalum, as a consequence it is often difficult to determine the price of tantalum. The difficulty in establishing a current price for tantalum is further complicated by the fact that there are many different types and grades of tantalum raw materials, all of which have implications for the refining process.


Source of info:
http://www1.sog.com.au/pages/tantalum.asp

k1w1
09-02-2005, 04:48 AM
Heavy Metal- Spinal Tap.

We all have our favorite heavy metal but for me Spinal Tap will always
hold a special place. Apart from a series of unfortunate incidents involving their drummers it is the first amplifier that went to eleven that shows how this was a band that was always pushing the boundaries.

Packersoldkidney
09-02-2005, 10:29 AM
Nigel: This is a top to a, you know, what we use on stage, but it's
very...very special because if you can see...
Marty: Yeah...
Nigel: ...the numbers all go to eleven. Look...right across the board.
Marty: Ahh...oh, I see....
Nigel: Eleven...eleven...eleven....
Marty: ...and most of these amps go up to ten....
Nigel: Exactly.
Marty: Does that mean it's...louder? Is it any louder?
Nigel: Well, it's one louder, isn't it? It's not ten. You see,
most...most blokes, you know, will be playing at ten. You're on ten
here...all the way up...all the way up....
Marty: Yeah....
Nigel: ...all the way up. You're on ten on your guitar...where can you go
from there? Where?
Marty: I don't know....
Nigel: Nowhere. Exactly. What we do is if we need that extra...push over
the cliff...you know what we do?
Marty: Put it up to eleven.
Nigel: Eleven. Exactly. One louder.
Marty: Why don't you just make ten louder and make ten be the top...
number...and make that a little louder?
Nigel: ...these go to eleven.

Mick100
09-02-2005, 10:14 PM
URANIUM



Following the advance of nuclear power generation over the last decades, uranium has become one of the
world's most important energy minerals.
Currently, uranium from nuclear reactors generates over 16% of the world's electricity or about 2,400 billion
kWh each year, which is equivalent to 12 times Australia's total electricity production. It comes from over 440
nuclear reactors with a total output capacity of more than 350 000 megawatts (MWe) operating in 31 countries.
In addition, 28 reactors are under construction and a further 71 are being proposed.


Australian Market
Australia is now one of the world's major producers and exporters of uranium, providing about 25% of world
uranium supply. Major countries buying Australian uranium include USA, Japan and South Korea.


Australia’s reasonably assured resources of uranium represent around 28% of the world total reserves.
Known Recoverable Resources* of Uranium
Tonnes Uranium Percentage of world
Australia 989,000 28%
Kazakhstan 622,000 18%
Canada 439,000 12%
South Africa 298,000 8%
Namibia 213,000 6%
Russian Fed. 158,000 4%
Brazil 143,000 4%
USA 102,000 3%
Uzbekistan 93,000 3%
World 3,537,000 100%
* Reasonably Assured Resources plus Estimated Additional Resources - category 1, to US$ 80/kg U



According to international policies regarding nuclear power, uranium can be sold only to countries which are
signatories of the Nuclear Non-Proliferation Treaty, allowing inspection to confirm that it is used only for power
generation purposes. Importantly, customer countries for Australia's uranium must also have a bilateral
safeguards agreement with Australia.



Supply x Demand Forces
Fundamentally, uranium prices are expected to remain above US$20/lb. While world consumption is currently
about 78,000t U3O8, mine production is around only 42,000t. The gap from consumption and production is then
filled up with stockpiles and recycled military uranium. As most of these stockpiles are largely depleted, concerns
regarding a supply deficit have driven spot prices from US$10/lb U3O8 in early 2001 to nearly US$20/lb U3O8 in
mid 2004.


Historical U3O8 Prices

1987 - $17/lb
1988 -
1989 -
1990 -
1991
1992 - $7/lb
1993
1994
1995 - $9/lb
1996
1997 - $16/lb
1998
1999 - $8/lb
2000
2001 - $7/lb
2002
2003 - $10/lb
2004 - $20/lb



Over the last decades, increasing fuel demand has been partly offset by the implementation of power reactors’
operational efficiencies. Consequently, uranium fuel requirements have increased at a lower pace than power
reactors have increased their capacity.
Currently there are 28 new reactors under construction around the world, with another 35 on order and a further
71 at the proposal stage. Assuming that all these reactors come into operation, demand for uranium will increase
by more than 30% in order to meet future nuclear power needs.


While the construction of nuclear power reactors is capital intensive, they are relatively cheap to operate
compared to gas/coal fired power stations. The cost of fuel for a nuclear power station is less than for an
equivalent coal fired power plant, making nuclear reactors competitive with coal and gas plants.
As coal raises environmental issues on its emissions and gas prices rise, nuclear energy looks progressively
more attractive. In 2002 Australian uranium exports saved the emission of some 290Mt of carbon dioxide. In a
greenhouse conscious world, nuclear power has now the potential to increase its share of the electricity market
at a faster pace than in the past.
A major supply deficit
is expected from
around 2008.
Expectations of growing uranium
demand over the next decade are
also supported by the World
Energy Council forecast that
electricity demand should almost
double from 1990 to 2002 and
concerns regarding the emission of
greenhouse gases.


Source - Martinplace Securities report

http://www.summitresources.com.au/

.

Packersoldkidney
09-02-2005, 10:21 PM
Here's one for ya Mick that I was gonna put on my iron thread, but yours is at the top of the page and I'm too lazy to scroll down to mine located just below yours.

Steel producers bet on new market dynamics

`For the next 10 years, steel prices are going to be higher than the ones obtained in the last 10 years.'

THE SUNSHINE days are here again for the Indian steel industry. A combination of factors appears to be working to push it on to a higher orbit. If the steel producers are grinning, consumers at large are wearing a grim look. The way the industry is slowly moving into a new era, chances are that prices will head only one way - northward.

In the emerging global scene, experts predict a shift in steel use away from the developed world towards populous nations like China and India.

B. Muthuraman, Managing Director of Tata Steel, is convinced that the steel dynamics will witness a dramatic change in the next 25-30 years. A quick recap will be in order before taking a peep into the future.

Steel making has come a long way since its commercial production in 1856. In the first six decades of the last century, there was only an upward movement in steel consumption. The growth averaged around 7-8 per cent a year. Subsequently, the growth rate halved over the next 30 years. From 1980 to until a couple of years ago, the rate slumped further and was hovering just around 2 per cent.

Saturation in U.S.

The reasons for the slide are not far to seek. The slowdown is primarily explained by the fact that the per capita steel use in the developed countries has settled down to the sustainable level of around 300 kg. "The U.S. does not build any more houses. By this, I do not mean that no houses are being built. I mean they are building very few houses. This is because the population increases in that country is marginal. So, very few houses, bridges and roads are getting built,'' Mr. Muthuraman says. Major U.S. steel consumption is in consumer durables such as cars, refrigerators and domestic appliances.

Even in a developed economy, the sustainable level of consumption is only 300 kg per person. "When a country is in infrastructure creation mode, the per capita consumption goes above 300 kg to even 1,000 kg and then comes down and remains stable around 300 kg,'' Mr. Muthuraman points out.

Given the fact that even in an advanced nation the sustainable level of per capita consumption is 300 kg, the six billion people in the world should be consuming close to two billion tonnes of steel. At the moment, however, the global steel consumption is just half of this. How do we scale the potential? This can happen if countries across the globe can scale the quality levels obtaining in the developed nations like the U.S., Japan and Europe. Even if a nation reaches that level, a steel consumption of 300 kg per person may still be required. If the population rises, the demand can go beyond the two billion tonne estimate.

The U.S, Europe, South Korea and Japan may have hit the dead-end vis-a-vis infrastructure growth. Further, they do not have a great people size to drive steel consumption further up. "The U.S. population is about 300 million. Europe has 300 million. Japan has 120 million or so. With such populations, the infrastructure creation gets completed quickly. And, a stable level of consumption is reached,'' points out Mr. Muthuraman.

After these nations reached a stable level, China is now on the upsurge. Chinese consumption of steel this year is slated to be in the vicinity of 290 million tonnes for a population of 1.3 billion people. This works out to a per capita consumption of 220 kg. A sizable part of China is still backward. So, there is huge scope for per capita steel consumption to go up substantially. "I can tell you that it may reach 600-700 kg in the next 15-20 years. It will then settle down to 300 kg,'' predicts the Tata Steel Managing Director. Ipso facto, he feels that ``the steel consumption... and economic prosperity in the world has now shifted to more populous countries. Therefore,

Mick100
11-02-2005, 07:34 AM
Oil prices surge

An International Energy Agency report stresses a strain from rising demand and weak supply growth.
February 10, 2005: 10:30 AM EST

LONDON (Reuters) - Oil prices jumped Thursday as the International Energy Agency said faster-than-expected demand and disappointing world supply growth threatened to keep the strain on world supplies.

The IEA's monthly Oil Market Report cut its forecasts for non-OPEC supply growth, especially from Russia where supply has boomed in recent years.

The agency, which advises industrialized nations on energy policy also revised up its 2005 oil demand forecast and reported a heavy fall in oil stocks during December.





Light crude for March delivery was $1.19 higher at $46.65 a barrel following the report. London Brent crude was up 89 cents at $44.02.

Lower expectations for Russian production growth and ongoing problems in other non-OPEC producers threatens to maintain the supply strain that fueled last year's 34 percent oil price rise.

"While 2004 was characterized by surprises in demand, 2005 has begun with changed to the expected supply," the Paris-based agency said.

The IEA also revised upwards world oil demand growth estimates by 80,000 bpd to 1.52 million bpd, based on a robust Chinese and South Asian outlook.

The IEA warned however of the danger of an economic slowdown, adding: "The impact of the oil price rise over the past year has been felt and will continue to be felt in 2005."

Latest official data Wednesday had shown that crude stocks in the United States are more than 20 million barrels above year-ago levels, while inventories of gasoline were nine million barrels in surplus to last year.

Dealers said news that top exporter Saudi Arabia would maintain supplies at current levels in March had reduced the chance of an imminent cut in output by the OPEC producers' cartel.

The Organization of the Petroleum Exporting Countries is due to review production policy on March 16 in Iran. Dealers had been wary that rising supplies and any sharp fall in prices may trigger an early OPEC cut agreement by telephone.


source: http://money.cnn.com/2005/02/10/markets/oil.reut/index.htm

.

Mick100
11-02-2005, 05:01 PM
By Bill Powers
February 4, 2005


www.canadianenergyviewpoint.com Email Article


Printer Friendly



In January 2004, I put together an article that appeared in the February 2004 issue of the Canadian Energy Viewpoint, which laid out the case for and against $50 oil. While the arguments against $50 oil have been thoroughly discredited, most market observers still do not understand that the price of oil will continue to head much higher. Below, I will examine several of the reasons why the price of oil will not significantly pull back from today’s levels and is likely to reach the $80 mark within the next 24 months.

At the foundation of many oil analysts’ argument for lower oil prices is the belief that OPEC can control the price of oil and use its spare capacity to keep the price within acceptable limits. There is one main reason this line of thinking is not valid – OPEC has no spare capacity whatsoever. OPEC, or more specifically Saudi Arabia, has given several indications over the past two years that it will increase production to keep oil prices at palatable levels, yet we continue to see oil prices reach new highs.

In past years, when there was excess production capacity both inside and outside of OPEC, high prices always brought additional supply onto the market. Times have changed and many analysts have failed to recognize it. Now that the world has reached the apex of Hubbert’s Peak (the thesis that once half of a petroleum-producing region’s reserves have been extracted, that region’s oil production will peak and decline along a bell-shaped curve), the world’s supply of oil will go down irrespective of price. This is an extremely bullish situation for the price of oil.

Some of the industry’s most informed participants believe there is little that can be done to increase worldwide oil production. Last year, British Petroleum announced that it will be returning to shareholders all cash flow it receives in excess of $25US per barrel. For every dollar the company receives in excess of $25US per barrel, BP will adjust its dividend or increase its share buyback program to return the cash flow to shareholders. BP has essentially given up its efforts to increase production or even keep production flat. Instead, the company has chosen to give shareholders back their capital with interest.

Another reason the price of oil is headed higher is that OPEC’s reserve base is vastly overstated. One of the world’s leading experts on petroleum supply, Dr. Colin Campbell, contends that OPEC has been vastly overstating its reserves for years. Campbell offers substantial evidence that OPEC reserve estimates are politically motivated. Kuwait is an excellent example of what is wrong with the way OPEC countries report reserves. The country reported a gradual decline in its reserve base from 1980 to 1984. This should be expected from a mature producing country. However in 1985, the country reported a 50% increase in reserves with no corresponding discovery. The Kuwaiti government increased its reserve estimate following the implementation of an OPEC production quota system that set country production levels based on country reserves. Kuwait was not alone in increasing its reserves for political reasons. In 1988, Abu Dhabi, Dubai, Iran and Iraq all significantly increased their reported reserves for political reasons. Even OPEC heavyweight Saudi Arabia followed suit and reported a massive increase in reserves in 1990.

Lack of new discoveries in both OPEC countries and non-OPEC countries has led to the current situation in which the world consumes far more oil each year than it discovers. According to Dr. Campbell, the world consumes four barrels of oil for every one it discovers. Clearly this situation cannot continue indefinitely since discovery and consumption must mirror each other.

The last reason I believe we will see $80 oil within the next 24 months is that worldwide oil supply is dropping and prices have not yet reached levels high enough to choke off demand. Despite record gasoline pric

Mick100
12-02-2005, 04:19 PM
Platinum - The Noble Metal

Ron Struthers

Platinum is often referred to as the 'noble metal'. Webster's definition of Noble is "high and great in character, showing greatness, outstanding or excellent, fine splendid, magnificent"

Platinum has certainly been standing up to this definition. The noble metal averaged US$845 a troy ounce in 2004, the highest average annual price since 1980 and also up 22% from the average in 2003 of $691/oz.

Platinum has always been a leader in the precious metal sector, other than a brief time in 1996 when gold was priced higher than platinum. The platinum price has been the top performer in this precious metal rally, climbing from $350 in 1999 to $950 in 2004 up 171%.

Meanwhile gold went from $255 in 1999 to a high of $457 in 2004 up 79%. Silver up about 95% from its 2001 low to recent high.

Since platinum spiked early in the year to $950, it has settled in a trading range between $825 and $875 for the past 6 months.

Probably the big question on your mind, can the platinum price maintain these lofty levels?




I think so, and here is why

You probably are aware that the most platinum production comes from South Africa (S.A.). In 2003, 75% of global supply came from S.A. and 17% from Russia. Three mines, namely Anglo American Platinum (Angloplats), Impala Platinum (Implats) and Lonmin plc Platinum (Lonplats), accounted for 96% of S.A. production. Norilsk Nickel (Norilsk) accounted for 98% of Russia's production and Montana's Stillwater produced 2% of the world's platinum.

Much higher metal prices normally translate into higher production, resulting in lower prices as supply increases. However, since most platinum is mined in S.A. and mainly by three producers, what is happening here is of importance.

The most important factor, is the main listed PGM producers operating in S.A. have seen the S.A. currency (Rand) appreciate significantly, it has been one of the strongest currencies and this has resulted in operating margins that have actually contracted while platinum prices have skyrocketed!

According to a very recent report by Deutsche Bank, based on their new long-term rand forecast, they have calculated an average marginal cost of production for an "average" Bushveld Igneous Complex operation at US$700 per ounce. Their modelling shows a range of marginal costs of production of US$600-850 per ounce on a 3-PGM basis depending on individual circumstances.

This US$700 cost/ounce is based on a decrease in both their short-term (three-year) Rand/US$ forecast by 20-25% & importantly, their long-term real rand forecast has decreased by ±22% to R7.10/US$ (from R9.10/US$).

You can see that unless platinum prices remain high, S.A. producers will be unable to expand to meet future higher demand. The cost forecast also considers a drop in the rand/US$ rate. If the rand rises further, so will costs and probably US$ platinum prices.

There are sufficient platinum reserves if the price is high to meet long-term demand, but delays in planned expansions have resulted in demand outstripping supply since 1998. The most notable example is Angloplats, which announced in 2000 its planned expansion from 2 million platinum ounces/year to 3.5 million by 2006. Every subsequent year it has missed its target and in December 2003 it revised down its target for 2006 by 15% to 2.9 million platinum.

The longer term mining trend looks bullish too, in future more UG2 Reef and less Merensky Reef will be mined, due to a greater depletion of the latter. UG2 has a higher proportion of palladium and less platinum and base metals, which will influence the supply of platinum. The metal ratios in the eastern Bushveld also have more palladium and less platinum and base metals than those in the western Bushveld, where historically the majority of the mining has taken place.

No stockpiles left

Since 1990, approximately 6 million platinum ounces and 19 million palladium ounces have been sold from the Russian strategic stockpile. The size of the Russian PGM strategic stockpile is

Mick100
13-02-2005, 10:57 AM
TWELVE GUIDELINES
FOR BUYING GOLD MINING STOCKS

Kenneth J. Gerbino

The twelve guidelines should help you to better understand some investment basics regarding the mining industry, especially if you do not have a background in geology or mining engineering. I have kept this as non-technical as possible so no one falls asleep. Keep in mind, these are basic guidelines and far from complete.

-If the company does not have an independent professional resource calculation for gold or silver or other minerals, know that someone is either speculating or guessing at the most critical data point regarding mining industry valuations. Be careful not to confuse "resources" with "reserves". Measured and Indicated resources are reliable as a resource. "Inferred resources" are very speculative mineral inventories, so be careful when "inferred" is used. A resource still has a long way to go to become an economic deposit, as opposed to "reserves" which are deemed to be proven economic and mineable ounces calculated by very strict engineering and government rules. Canada's National Instrument 43-101 is one such guideline regarding resources and reserves.


-I would suggest your portfolio be 60% invested in companies already producing gold or silver profitably. The other 40% divide into companies close to production with impressive projects or very far along in defining large and significant mineral resources. Producers should include majors and mid-tiers (your monetary insurance, since they undoubtedly have the goods in the ground). Look for mid-tiers with good growth profiles. Junior producers with new projects are also ok.

-Companies with lots of money in the bank or access to sponsorship from top investment banks in Toronto, London and Vancouver is vital in this capital intensive business and always a good thing to look for. Diversify: have at least 15 good companies. Depending on your risk tolerance you could allocate a small portion to grass roots exploration stocks but know this is the very high-risk end of the business.

-The industry has changed in the last five years. Exploration and development budgets from 1998 to 2002 declined dramatically. Therefore going forward, in my opinion, any substantial project that is near feasibility (an extensive outside engineering report based usually on tens of millions of dollars of geological, metallurgical, and engineering work) could be a buy-out candidate for major and mid-tier companies that need to catch up on reserve replacement and growth.


-"Good management" is an overused word. My definition of good management is 20 year mining professionals who have had successful executive positions with large or successful mining companies or projects in the past. If you see names like Barrick, Newmont, Placer, Anglo, Goldfields, etc. on the resume you are most likely dealing with some quality professionals. People who ran mid-tier companies or successfully helped bring medium to large projects to production also qualify. There are always exceptions, but you better know who you are dealing with. Direct mail pieces touting some gold stock and claiming top management should be carefully checked out.


-Size is very important. The larger the deposit or potential resource the better. Small mines are not worth your trouble as there are few institutions that will finance them and fewer companies that will ever acquire them. With gold mines try and look for 2-3 million ounce and above possibilities. Mining giant Goldfields, only targets projects with 2 million reserve ounces. With silver, 100 million ounces should be your minimum. But the above still has to be qualified. If the resource is too deep under the surface, of very low grade (richness), or has one of many other negative reasons it may not ever be economic to mine.

-Tonnage is important. Big tonnage operations create economies of scale that can make some low metal values economic to mine. Three hundred million tonnes (a tonne is 2204.62 pounds, not to be confused with a ton which is 2000 pounds) for an open pit gold mi

Skol
14-02-2005, 09:00 AM
The Feb 8th Bulletin magazine has a two page article on nuclear power and the shortage of uranium. 68% Rio Tinto owned ERA gets a mention.

Mick100
14-02-2005, 08:25 PM
A Case For Investing in Water:

http://www.financialsense.com/editorials/dickerson/2005/0211.html


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Mick100
15-02-2005, 09:17 PM
Fresh water - Blue Gold

An essay by Jim Puplava

http://www.financialsense.com/Market/archive/2004/1122.html


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Mick100
16-02-2005, 07:21 PM
Bloomberg News

E-Mail This Story Printer-Friendly Format

China Says Oil to Exceed 50 Percent of Its Energy by 2010
Feb. 14 (Bloomberg) -- China will rely on oil for more than half of its energy by 2010, when net imports will rise to between 180 million tons and 200 million tons of oil a year, a Chinese official said.

``China should import more energy - that's the picture for oil and gas,'' Gao Shixian, director of energy economics and development strategy at China's National Development and Reform Commission, said at a conference in London today. ``Energy diversification is a priority for China.''

The world's second-largest oil consumer after the U.S., China relies on coal for two-third's of its energy. Rapid growth in Chinese demand helped send oil prices to record levels last year.

By 2010, oil will account for between 51.4 percent and 52.6 percent of China's energy needs, up from 29.1 percent in 2000, Shixian said at an ``IP Week'' conference organized by the U.K.'s Energy Institute. In 2010, the country's oil demand will probably be between 350 million tons and 380 million tons.

Last year, China's net import of oil was more than 100 million tons, of which about half came from the Middle East.

China's natural gas consumption is rising at an even faster pace and the country is projected to have net gas imports of between 20 billion cubic meters and 25 billion cubic meters in 2010, from zero imports in 2000.

By 2010, natural gas will account for 20 percent of the country's energy needs, as the percentage share for coal declines. The country may import more gas in the form of liquefied natural gas, or LNG, as industrial demand grows, Shixian said.

China paid $1 billion more for oil and gas last year because of higher prices, he said. The country has about 40 million private cars, he said, a low figure when compared with developed nations considering that China has about 1.3 billion people.

China's demand is unlikely to rise as fast in 2005 as in 2004, Adam Sieminski, global oil strategist at Deutsche Bank AG, said at the conference.



To contact the reporter on this story:
Stephen Voss in London sev@bloomberg.net

To contact the editor responsible for this story:
Tim Coulter at tcoulter@bloomberg.net
Last Updated: February 14, 2005 11:54 EST

dingdong
16-02-2005, 08:23 PM
O Mick I am pleased you do not just follow gold. Most people apart from the blinkered yankee infidels have worked it out that gold is going nowhere.

Mick100
16-02-2005, 08:34 PM
I would describe myself as being bullish on all commodities / resources abdab, including gold

Only 1 in 10 co's that i hold is primarily into gold. You may have got the wrong impression from my rantings on the gold thread.


Mick

whiteheron
17-02-2005, 07:25 PM
Like Mick100 I am very bullish on commodities and resources

Initially I was not sure how long that the bullishness would last , but I am now convinced that it will be with us for at least another two or three years and perhaps much longer , ten years or more a possibility

I have the vast majority of my funds invested in commodities and resources , with a wide spread within the sector
Returns achieved over the last couple of years have been very satisfying and I expect a continuation thereof , but at a slightly reduced rate

Mick100
17-02-2005, 07:28 PM
China's Iron-Ore Imports Will Grow 15% This Year, SSY Says
Jan. 13 (Bloomberg) -- Chinese imports of iron ore for use in steelmaking will expand by 15 percent in 2005 as China increases steel output, shipbroker Simpson Spence & Young said.

Iron ore imports will rise to 240 million tons as the world's fastest growing economy starts new steel mills, SSY told a meeting held by the Organization for Economic Cooperation and Development today in Paris.

The iron ore mining industry will maintain its status as the leading growth area for the shipping industry, SSK said in an e-mailed report used as a presentation at today's conference.

Melbourne-based BHP Billiton Plc, the world's largest mining company, Rio de Janeiro-based Vale do Rio Doce and London- based Rio Tinto Plc will boost their iron ore mining capacity by more than 150 million tons a year in the next four years to meet higher demand from steelmakers, SSY said.

China's steelmakers will raise output of the metal used in washing machines and cars by 12 percent to 303 million tons this year, SSY said, and by a further 7 percent in 2006.

Steel demand growth in China may slow to an annual 7 percent to 8 percent this year and next, compared with as much as 25 percent a year between 2001 and 2004, SSY said.

Iron ore prices, which rose 19 percent last year, may increase 20 percent this year to $30 a ton, Morgan Stanley said in a Nov. 15 report. World Steel Dynamics said surging coking coal and iron ore prices will likely add $35 a ton to integrated steel mill costs next year.

Imports of coking coal, another ingredient in steelmaking, will grow as much as 20 million tons a year this year and next as China boosts its steelmaking capacity, SSY said.



To contact the reporter responsible for this story:
Matthew Craze in London at mcraze@bloomberg.net.

To contact the editor responsible for this story:
Stephen Farr at sfarr@bloomberg.net
Last Updated: January 13, 2005 12:44 EST

Mick100
18-02-2005, 08:15 PM
The Super cycle Thesis - Commodities

http://www.aireview.com/index.php?act=view&catid=5&id=1328


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Mick100
18-02-2005, 08:21 PM
Metal price forcasts

http://www.aireview.com/index.php?act=view&catid=8&id=1384

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whiteheron
18-02-2005, 08:29 PM
In my opinion copper will remain at very high prices for some time
It has just broken through US $1.50 per pound and is in supply deficit

China has an insatiable thirst for it for such things as power stations , communications , housing , vehicles etc and this will continue for some years

Check out price and stock charts at www.kitco.com

Mick100
18-02-2005, 08:36 PM
If Commodities Beckon, Use Caution
Monday July 12, 2004 11:22 am ET
By Will Swarts, TheStreet.com Staff Reporter


If first-half trends continue over the next six months, this could be the year of commodities. Stocks have fared poorly, bonds worse, but commodity investors have seen gains from the rising prices of everything from oil to steel to meat.



So, if you're looking for a piece of the action, investment professionals say it's best to spread the risk throughout the futures markets, rather than betting big on soybean contracts and taking a beating in these fast-moving and often volatile markets.

Whether investors buy into mutual funds that invest in commodity baskets or commodity-related equities, or take on a bigger commitment with some of the closed-end partnerships that follow futures indices such as the Goldman Sachs Commodity Index or the Dow Jones AIG Commodity Index, financial advisers warn that any move into these volatile markets requires a good deal of research to make sure you know what you own. Most funds that offer some type of commodity exposure are heavily weighted to the energy sector, which has been especially volatile over the last several months.

But once you know what you're buying, many investment professionals say a small allocation of 5% to 10% of your portfolio is a smart move.

"That would be the maximum allocation," says Jim Baer, managing member of Uhlmann Price Securities, which sells the Rogers International Raw Materials Fund, a limited investment partnership based on an index devised by the high-profile investor Jim Rogers, best known for his book Investment Biker.

"As far as your portfolio's concerned, this will give you a noncorrelated investment that normally works the opposite of stocks and bonds, and real estate," Baer says.

Lynn Russell, a mutual fund analyst at Morningstar, says most small investors get exposure to commodities through funds, either the (Nasdaq:PCRAX - News)Pimco Real Return fund or the (Nasdaq:QRAAX - News)Oppenheimer Real Asset fund, which invest in commodity indices, or in any of the 40 or so natural resources equity funds, which led the fund tracker's performance categories last year with an average return of 32%, well ahead of the S&P 500's 22.3% gain.

Russell says resource funds -- which take on commodities by investing in oil, timber, mining and agricultural companies, for example -- continue to outpace the S&P this year, but that buyers should know funds such as the (Nasdaq:VGENX - News)Vanguard Energy don't offer the same diversification as the direct commodity buys.

"It's not just that it's apples and oranges," she said. "Some are actually kumquats. Equities don't move in lockstep to the commodities themselves. The funds that invest in equities are going to move differently than the commodity funds do, and there is much more variability in how different types of equities behave."

She and others say the recent boom in commodities owes much to the rapid pace of development in large emerging markets, especially China and India. That opens an investor up to geopolitical risk, and that can mean wide price swings if a national economy slows. Combine that with the recent volatility of the oil market, and it's no surprise that Michael Kitces, a financial planner in Columbia, Md., urges caution, telling small investors to avoid any sort of individual futures contract.

"They're big markets and they move very quickly, and you can't possibly have more information about them than the people on the trading floor," he says. "By the time you hear the Florida orange crop is bad and orange juice futures are tanking, the price is already down. It's virtually impossible for you to make winning trades on information that others don't already have. You can't analyze commodities like stocks."

But investors who want to try their hand at timing those markets in some fashion can head for a quartet of funds offered by Maryland fund company Rydex, which allows rapid trading of its funds. The no-load funds that focus on exposure to co

Mick100
19-02-2005, 08:26 AM
China - driving Global Raw Materials Growth

A presentation from BHP

http://www.abare.gov.au/china/presentations/Kirkby.pdf


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Mick100
20-02-2005, 06:46 PM
Unloved, undervalued and underowned - (commodities)

Jim Puplava


http://www.financialsense.com/Market/puplava/2005/0124.html


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Mick100
20-02-2005, 10:35 PM
Uranium mining in Australia

http://www.uic.com.au/mines.htm

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Mick100
20-02-2005, 10:54 PM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Copper Trades Near 16-Year High on China Demand, Weaker Dollar
Feb. 18 (Bloomberg) -- Copper traded near a 16-year high in London as China's expansion of its electricity network boosted demand and a weaker dollar made commodities cheaper for holders of other currencies.

Copper futures topped $3,200 a metric ton for the second time since March 1989 and headed for the biggest weekly gain since mid- December. The metal has climbed 4 percent since Feb. 11 as Asian traders return to the market following a seven-day shutdown for the Lunar New Year holidays. Copper is used mostly to make electrical cables and wiring.

``China's insatiable need for more power will help keep the copper price bubbling,'' Gary Mead and Jessica Cross, analysts at U.K.-based consulting company Virtual Metals, said in a report published yesterday by Fortis Bank. Copper for delivery in three months may reach $3,500 a ton in the first half, they said.

The contract was up $33, or 1.1 percent, to $3,190 a ton on the London Metal Exchange at 9:13 a.m. It earlier reached $3,215, or $5 short of yesterday's intraday peak. The metal has risen 1.3 percent this year after a 37 percent gain in 2004.

``Investment funds were the driving force behind the rise,'' Tobin Gorey, an economist at Commonwealth Bank of Australia in Sydney, said in a report today. ``A weaker euro-dollar did the market no harm.''

Dollar Slump

The dollar headed for its biggest weekly loss against the euro after Federal Reserve Chairman Alan Greenspan declined to signal an acceleration in interest-rate increases. Copper is denominated in dollars.

The U.S. currency is down 2.5 percent from a three-month high of $1.2732 per euro on Feb. 7. Greenspan yesterday told the House Financial Services Committee that U.S. interest rates are still ``fairly low'' after six quarter-point increases since June.

Demand for copper in China, the world's biggest user, will rise 8 percent this year to 3.7 million tons, more than a fifth of the global total, according to London-based GFMS Metals Consulting Ltd. The nation's imports may rise more than a third to 1.5 million tons. China is using about 55 percent of its copper in the energy sector, the Virtual Metals analysts said.

Power producers in China are adding capacity to supply an economy that expanded 9.5 percent last year, the fastest pace in eight years. China experienced power shortages in four major cities and 24 of 27 provinces last year.

Copper for April delivery, the most active contract on the Shanghai Futures Exchange, rose 2.5 percent today to 30,860 yuan a ton.

Shrinking Gap

Global copper demand will exceed production by 172,000 tons this year, according to Merrill Lynch. The gap will shrink from 787,000 tons in 2004 after mining companies including Melbourne- based BHP Billiton and Phoenix-based Phelps Dodge Corp. boosted output, the bank's analysts said in a Feb. 14 report.

Copper consumers are making for lagging production by draining stockpiles. Inventory monitored by the LME has slid 87 percent since the start of last year to 55,800 tons.

Most other metals also rose on the LME. Lead had the biggest gain, rising $29, or 3.2 percent, to $948 a ton, close to a six- week high. Nickel rose $250, or 1.6 percent, to $15,500 and tin climbed $90, or 1.1 percent, to $8,050. Zinc was unchanged at $1,361 and aluminum fell $6 to $1,903.

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whiteheron
21-02-2005, 08:16 AM
Mick100

I have been very bullish on copper forat least a year and have leaned towards buying gold shares that are backed up by other minerals , especially copper or silver , on the basis that it is better to have more than one string in your bow

If you take a look at the copper charts on the Kitco site it is pretty obvious thgat copper will trade at a considerable premium for quite some time ;
was approx 80c up to about 18 months ago
now $1.50 plus , 16 year highs
in supply deficit
stocks continually reducing
huge demand , especially from China
etc , etc

So I cant see any settling back in the price for some considerable time
And if it was profitable to produce copper when it was 80c what does that make it now ? !!!
Yes , there is money to be made --- I am in no doubt about that

Mick100
21-02-2005, 09:05 AM
WH, I expect this bull market in resources to last for another 10 yrs. Each of the base metals will have their day in the sun over the next 10 yrs. Copper, coking coal and iron ore are the frontrunners at the moment but it's unlikely that they will still be in front in 10 yrs time

One has to keep an eye on the supply demand equation for each individual metals as we move through this bull market. Each will have their own minnie bull market within the resouces bull market. As prices increase, supply will be ramped up and deficits in supply will be replaced by surpluses. Prices will then level off and start falling.


Mick

whiteheron
21-02-2005, 10:09 AM
Mick100

Yes , one needs to be out before supply is ramped up to meet or exceed demand and one has to be continuously vigilant to assess when this situation is nearing
I have come to the conclusion that you and I are pretty much on the same wave length on such matters

With copper I believe that supply will not outstrip demand for some time , maybe for five or ten years
Stocks are nearing critical levels and if a situation is reached where there is simply not enough stock to satisfy demand then anything could happen

One point that I failed to make above is that with the advance of technology it is now possible to provide high speed internet connections over copper cables
This must result in copper cables being preferred over fibre optics in many cases and hence a further demand on copper
I had initially thought that fibre optics would largely take over from copper cabling , but this would not now seem to be the case

The rules of supply and demand are very strong ; they pretty much rule metal prices , with the exception of silver for the time being maybe , but I am sure that at the end of the day the laws of supply and demand will win with silver also , even if it takes another two or three years
There is something really tricky going on with silver at present in my opinion --- some form of price rigging , short selling etc
I am just waiting for the day when it can no longer be sustained and that those that are involved are bitten in the bum

21-02-2005, 05:12 PM
Whiteherron why would copper be preffered for High speed internet When F/O is faster and allso better for phone calls.

Mick100
21-02-2005, 08:43 PM
SPEAKING FREELY
Why oil prices are barreling up
By Andrew McKillop

Speaking Freely is an Asia Times Online feature that allows guest writers to have their say. Please click here if you are interested in contributing.

LONDON - In the past week, oil prices have regained about US$3 a barrel after hitting a low of $45. Apart from the perennial US weather factor, positive sentiment was reinforced by IEA (International Energy Agency) data revising previous forecasts for world oil demand growth in 2005 by 80,000 barrels per day, or 0.08 million barrels/day (mbd), to the suspiciously modest figure of 1.52 mbd.

This is hard to fathom because the IEA also raised its final estimate of world demand growth in 2004 to 2.68 mbd. In percentage terms, growth in 2004 was very close to 4%, the highest for over 25 years. This number conflicts with forward planning ideas and beliefs of the IEA and other energy players - especially the world's 10 biggest oil corporations. None of these players plan for demand growth beyond 1.75% per year. Some, such as BP and ENI, still claim that the "normal" long-term growth is about 1.3% per year.

On the consumer side, to back the notion of slow growth being a fixed paradigm, oil users are everywhere thought to show "price elastic" response to higher prices. That is, they cut their consumption as prices rise. On the supply side, the same high prices are expected to bring new and big suppliers into the market. If this does not happen, we have an oil crisis. This pre-crisis context is directly reflected in the market by rising volatility on a longer-term upward price profile. The IEA forecast of growth in 2005 dropping about 42% against 2004 is, we can surmise, purely wishful thinking.

The Organization of Petroleum Exporting Countries (OPEC) is usually wheeled into the pricing melee by saying it will now "defend" $40/barrel, after waiting until December 2004 to say it was no longer "defending" a price range of $22-28/barrel. But the question is: what spare capacity does OPEC really have? This raises the key question as to what exactly OPEC's current 11 members (OPEC-11) produce and export. Using data from the Oil & Gas Journal on world daily average production in 2004 and 2003, only Iran, Qatar, Kuwait and Saudi Arabia are credited with production hikes of over 3% in 2004, excluding the very special case of Iraq. For Oil & Gas Journal, there was a 55% increase in Iraq's daily average production to about 2.05 mbd in 2004, while EIA (Energy Information Administration) and the DoE (Department of Energy) figures give about 1.55 mbd, almost identical to the 2003 average output. BP places Iraq's 2003 production at a daily average of 1.33 mbd. This is exactly half the growth in world daily average oil demand in January-December 2004.

Any production numbers for OPEC are subject to the key question: net or gross? Iraq, for example, has soon recovered pre-war domestic oil demand of about 0.65 mbd despite shattered economic infrastructure and 60% unemployment. US occupation forces in Iraq are credited with about 0.35 mbd demand. During the economic reconstruction phase that may now be about to start, Iraq's domestic demand will certainly increase rapidly. Normal economic development in oil producer countries is of course oriented to energy-intensive activities. Saudi Arabia's domestic oil demand in 2004, according to BP, increased by 5.5%, much more than its 3.2% hike in daily average oil production. Kuwait's domestic oil demand, again according to BP, has been growing at over 10%/year of late (19.8% in 2003), dwarfing all increases of its national oil production.

This pattern of domestic demand increasing much faster than production is common to more than nine out of 10 oil producers, both OPEC and non-OPEC. Net exports, therefore, will always tend to grow slower than national production. Conversely, world oil import demand is significantly higher than consumption demand. In 2004, for example, world oil demand rose 2.68 mbd, but import demand growth was about 3.1 mbd.

This is related

whiteheron
21-02-2005, 09:07 PM
ENIGMA

I understood that fibre optics was significantly more expensive than copper and hence would not be used where copper would would be adequate , but since reading your posting I have read up on the comparisons
Whilst not pretending to understand all of the technical matters I have discovered that it does appear that fibre optics still has significant advantages over copper even though copper can now be used for fairly high speed connections and that the price differences are not all that significant

Thank you for pointing this out ; maybe the article that I read on high speed copper connections ( and I cant recall where it was from ) gave me a wrong message

21-02-2005, 10:01 PM
WhiteHerron I read the same article but took it in the correct context, that it would allow Broadband over copper in Existing Subburbs without the huge cost of rewiring with Fibre Optic. But all new work would except some unusual locations would be in Fibre Optic

whiteheron
21-02-2005, 10:06 PM
ENIGMA

Yes , on reflection I have to agree with you totally

Thanks

Mick100
22-02-2005, 08:09 PM
An asset class for resessionary Times

http://www.financialsense.com/editorials/bonneuil/2005/0126.html

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Mick100
23-02-2005, 08:30 AM
Some short term charts on the metals

http://www.kitco.com/ind/Lee/feb212005.html

,

whiteheron
23-02-2005, 08:45 AM
Mick100

Thanks , some good charts and comments there

Do you know if this is a " one off " or is it available as a regular report ?

Mick100
23-02-2005, 09:29 AM
WH, there is a link on that kitco site

maybe more info there

www.goldinsider.com

,

arco
23-02-2005, 02:51 PM
Followers of this thread may find the site below of interest........

http://hedgefundmgr.blogspot.com/

Arco

Mick100
23-02-2005, 08:01 PM
China's Food and Agriculture - looking to the future

http://www.ers.usda.gov/publications/AIB775/

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Mick100
24-02-2005, 09:51 AM
Markets - Zinc, copper, Aluminum

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=7709480&pageNumber=0


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stolwyk
25-02-2005, 06:46 AM
CHINA COULD USE 15% MORE COPPER/YEAR.

http://www.iii.co.uk/news/?type=afxnews&articleid=5219543&action=article

BEIJING (AFX) - China's demand for electrolytic copper will continue to grow 15 pct annually over the coming years, the official Xinhua News Agency reported.

Citing Tongling Nonferrous Metals (Group) Inc president Wei Jianghong, Xinhua said that the country's copper demand in 2004 was 1.7 mln metric tons.

Copper consumption has continued to increase at a growth rate of over 15 pct year-on-year since 2000, the report added.

derek.jiang@xinhuafinance.com

dj/ap/tr

Mick100
25-02-2005, 08:31 PM
High iron ore costs hit global steel firms

http://news.bbc.co.uk/2/hi/business/4289291.stm

,

stolwyk
26-02-2005, 06:49 PM
THanks Psycho

The great iron ore goldrush begins
Producers have been caught napping by a spectacular price rise, writes Andrew Trounson

February 26, 2005
"SOMEONE has stuffed up big-time," an MBA graduate schooled in the virtues of market research declared over her wine after hearing news that Australia's iron ore miners had secured an unprecedented 71.5 per cent hike in iron ore contract prices.

On top of a 120 per cent rise in coking coal contract prices earlier this year, the deal, effective from April, means Australia is set to reap billions of additional export dollars as it basks in the sunshine of one of the biggest commodity booms in history.

The surprise cave-in by the Japanese steel mills on benchmark contract prices also underscored the complete turnaround in recent years in the balance of power in the global minerals game, with the miners now able to dictate terms.

The coal and iron ore price rises will boost the Commonwealth Bank's index of Australia's commodity export prices by 19 per cent, putting the US dollar price index more than 40 per cent above the previous peak in 1989.

Shares in major miners BHP Billiton and Rio Tinto soared to record highs on the news, while shares in Australia's largest steel maker BlueScope dropped in the face of galloping raw material costs.

"What is going on in the raw materials area is quite frankly inflationary," BlueScope chief executive Kirby Adams said this week.

Steel makers are already raising prices and are considering slapping customers with surcharges.

But the MBA graduate couldn't quite believe that in this modern age of elaborate market analysis and forecasting such a price rise could have happened.

The easy answer is that no one had fully reckoned with the massive commodity demand that has been unleashed by China's rapid industrialisation and its emergence as the world's largest steel market, which feeds on the key raw materials iron ore and coking coal. China's steel consumption is set to rise over 10 per cent this year compared with 5 per cent growth forecast globally.

But the commodity price boom has been exaggerated by the unpreparedness of miners that are now struggling to ramp up production quickly enough after years of under investment because of previously low prices. And even as they scramble to dig more out of the ground, rail, port and shipping infrastructure can't keep up, causing bottlenecks and delays globally. In Australia, queues of shipping off ports has reached 50 vessels in some instances.

BHP Billiton chief executive Chip Goodyear said this month there was little spare capacity in the industry and that supplies of major commodities were set to continue to lag behind global demand this year.

"Demand romps on and the supply side is muted," Mr Goodyear said.

The shortage of shipping has caused the average freight rate from Australia to Japan to blow out to an average $US21.15 a tonne last year, compared with a previous 10-year average of $US7.74/tonne.

"Once miners see that the demand is real, then it takes time to bring production on, and, even if they accelerate, they face bottlenecks," Dallas Horadam, steel analyst at AME Mineral Economics in Sydney said.

The answer to the question, then, of who "stuffed up" lies partly with the miners, though they are hardly suffering for it as they pop their champagne corks. But the steel mills must also shoulder blame for not sending the right price signals to ensure a more orderly ramp-up of production.

Back in the 1980s and 1990s, Australian coal and iron ore price negotiators would troop off to Tokyo every year to bargain for prices, only to be played off against one another by the steel mills. The first to cave in of either BHP or Rio would be granted extra tonnage, sometimes only after the miner had agreed to a secret price discount. On returning to Australia, they would be routinely be criticised by unions facing job losses for not having bargained hard enough.

But the world has now been turned upside down.

In a sure sign that t

Mick100
27-02-2005, 07:28 PM
Changing Of The Guard
by Mark M. Rostenko
Editor, The Sovereign Strategist
February 24, 2005


It’s been an interesting week so far and one that may very well herald a major turning point in the U.S. financial climate. Stocks got battered after failing to penetrate the cyclical bull market high, copper surged to a new 14-year high, gold had its largest one-day advance in some time. And flying well below the mainstream radar, the CRB Index of commodity prices broke out to a new bull market high, its highest in decades.

Fascinatingly enough, while the prices of just about everything continued to surge into the stratosphere, the dingbat mainstream financial press worked overtime to assure everyone that prices aren’t actually rising. The “tame” CPI report “edged up a TINY 0.1%” we’re told. Energy costs “went down significantly” (someone ought to tell $51 crude oil which apparently doesn’t read the CPI data). According to official reports, it was merely a “small increase” and inflation “remained very much under control.” Tame tame tame!

Not to worry, Alan “I didn’t know it was a bubble” Greenspan assures us that inflation is “anchored”, whatever that means. Bear in mind this is the fellow who assured us that $40 crude oil was “transient.” I’ll say, given its swift transition into the $50s! Unfortunately for the spin doctors, reality spins a far different tale.

While the Wall Street/Pennsylvania Avenue machine works tirelessly to keep our attention fixated upon the “healthy” stock market and housing bubbles, the stealth bull market in commodity prices continues. And that doesn’t bode particularly well for mainstream financial vehicles.

There is an established inverse-cyclicality to the prices of hard assets and paper assets. In general, one is vastly outperforming the other and over the long haul, you don’t do well in both at the same time. According to Barry Bannister of Legg Mason Wood Walker, that cycle spans about 18 years, which is pretty much in line with my estimation of a 20-year cycle which I discussed in TSS during the very early stages of the current commodity bull.

When paper assets are flying higher, commodities tend to fare poorly and vice versa. In the 1970s many commodities surged to all-time highs, surpassing their previous records by huge margins while stocks languished. Two years after grand-daddy commodity gold topped out in 1980, stocks began an 18-year bull run that ended in 2000. With stocks topping out after 18 years and commodities in an emerging bull market, what are the odds that stocks will be the “next big thing” in coming years? In technical terms, pretty freakin’ slim. Unless of course this cyclical pattern was merely a 130-year fluke. And I sincerely doubt that.

You don’t have to believe in cycles to have faith in the bloody obvious. In order to sustain a long-term bull market you need long-term bullish fundamentals. Ask yourself: are conditions more or less favorable for stocks today than they were between 1982 and 2000? Well, let’s see. We have rising inflation. A housing bubble that must and will burst in time. We’re waging a costly war in Iraq and getting ready to wage another in Iran. The trade and budget deficits stand at all-time record highs, consumer and national debt are higher than ever and savings are near an all-time low.

Meanwhile, commodities are on fire, many of which still have plenty of room to go before breaching their lifetime highs. The fundamentals are undeniably and powerfully in place: China is consuming metals and oil like Rosie O’Donnell sucking up chocolate cakes after a gut-wrenching two hour fast. More importantly, supplies of many commodities have dwindled over the years as everyone shifted their focus to the easy-money paper asset boom of the 1990s.

Major U.S. steel mills went bankrupt and shut down over the past couple of decades. When’s the last time you heard about a major gold find or a major new mine coming on line? Many U.S. oil companies are pumping the same old wells, not having discovered too many new major oil fields in qui

Mick100
01-03-2005, 07:12 PM
World market could be hurt as severe coal shortage worsens in China

Sun Feb 27, 1:47 AM ET Business - AFP



BEIJING (AFP) - China's breakneck economic growth is causing a dangerous shortage of its most important energy source coal, with potential consequences for the entire world, state media warned.

Scarcity is so severe officials even worry aloud that it could cause social instability among the 1.3 billion Chinese, the China Business Weekly reported.


"The imbalance between coal demand and supply will become more acute this year," the National Development and Reform Commission said, according to the paper.


"Easing the tightened coal supply will be the first priority for us," said the commission, the nation's top planning agency.


China is the world's largest consumer and producer of coal, which accounts for about two thirds of its energy needs.


The impact of the coal shortage could be global since soaring domestic demand could force the government to cut off export quotas and push up global prices, the paper said.


Last year, when China's economy expanded by 9.5 percent, its voracious demand was a key factor in causing international prices of coal to double.


One of the first sectors to be affected when coal supplies are under pressure is the power industry, which consumes about half of China's coal output.


The paper said the government was concerned a disruption in the power supply during the Lunar New Year earlier this month could have sparked social instability.


To prevent this from happening, it ordered state-owned coal mines to operate throughout the week-long festival, while railroads were told to use the extra holiday runs to transport more coal.


The nation's coal consumption this year is expected to rise by 120 million tonnes, or six percent, to 2.1 billion tonnes, according to estimates by the China Coal Industry Association.


The problem is that the opening of new mines is likely to result in no more than an additional 100 million tonnes of coal in the course of 2005, the paper said.


"New coal mines cannot meet the faster demand. There is little room for additional production," the National Development and Reform Commission said.


"All kinds of coal mines are almost operating at full capacity, or beyond capacity, and the pressure on safety is huge," it said.


The safety issue was highlighted most recently in the Sunjiawan coal mine in northeastern Liaoning province, which was among the operations that carried on extraction throughout the Lunar New Year festival.


The mine's workers only had one day off and towards the end of the festival it was struck by tragedy when a gas explosion erupted, killing up to 215 in China's worst recorded coal industry disaster for over 60 years.


Even if overtaxed mines can produce the amount of coal needed to keep fueling the economy, there is not guarantee that it will reach the power plants and factories that need it.





Rail is the preferred method of transporting it from the mines in the north to the industrial centers in the east and south.

But the railway system is also overburdened by the hyperactive economy and last year more than 65 percent of all transportation requests had to be turned down, the paper said.

Mick100
02-03-2005, 10:05 AM
Copper Rises to Record in London on Japan's Industrial Output Feb. 28 (Bloomberg)

-- Copper reached a record high in London after Japan, the world's third-largest user, reported a bigger-than-expected increase in industrial production, signaling that demand for the metal may rise.

Copper for delivery in three months was up $41, or 1.3 percent, to $3,238 a metric ton on the London Metal Exchange at 10:36 a.m. It reached $3,275, the highest since the contract began trading in its current form in June 1986. The yen rallied, making copper cheaper to buy with the Japanese currency.

``Japan's industrial production in January is encouraging and that's driving copper higher,'' Liu Songtao, a trader at Dalu Futures Co., said from Beijing. ``If the dollar continues to slide, it's very likely we'll see copper trading at $3,500.''

Industrial production increased 2.1 percent from December, seasonally adjusted, Japan's Ministry of Economy, Trade and Industry said. Global copper use rose 7 percent last year to a record 16.4 million tons because of higher demand from China and Russia, exceeding new supplies by 579,000 tons, the U.K.-based World Bureau of Metal Statistics said in a report.

The benchmark copper contract in London had climbed as high as $3,260 on Feb. 22, topping a record set in January 1989. Prices for the metal, used in electrical wiring and power cables, have surged 41 percent since the start of last year.

Yen Rallies

The yen rose to 104.32 against the dollar, from 105.23 on Feb. 25, according to electronic currency trading system EBS. The euro was up 0.1 percent against the dollar to $1.3257.

``Copper is more a technical market than a fundamental market in recent weeks,'' said Kevin Tuohy, a trader at Man Financial in London. Funds are buying ``on the expectation that they are going to benefit from a lower dollar.''

Most of the five other metals traded on the LME followed copper higher. Aluminum, turned into beverage cans and car parts, rose $23, or 1.2 percent, to $1,914 a ton. It had fallen for two days from a 10-year high of $1,987.50. Zinc, used to coat steel, jumped $16, or 1.2 percent, to $1,396, lead climbed $5, or 0.5 percent, to $950 and tin was unchanged at $8,375.

Shares of BHP Billiton and Rio Tinto Group, which own stakes in the world's two largest copper mines, rose in London as the companies sought price increases for iron ore sold to steelmakers. Melbourne-based BHP, the world's biggest mining company, was up 11 pence, or 1.4 percent, to 779 pence. London- based Rio, the No. 3 mining company, rose 18 pence, or 1 percent, to 1,845 pence.

Rio and Brazil's Cia. Vale do Rio Doce, the world's largest iron-ore producer, last week won price increases of 71.5 percent from Nippon Steel Co., Japan's biggest steelmaker.

Electronics Gains

Japan's manufacturing gain was led by electronics companies such as Toshiba Corp., which use copper in wiring and components, and exceeded the median forecast of 1.5 percent from 26 economists surveyed by Bloomberg News. Industrial output rose 3.1 percent in South Korea, Asia's third-largest economy, the most in more than a year, that nation's statistics bureau said.

Japan unexpectedly slipped into recession last year for the fourth time since 1991 as export growth slowed and consumer spending stalled. The economy shrank at an annual 0.5 percent pace in the three months ended Dec. 31, the third quarter of contraction.

China and the U.S. are the world's two largest copper consumers. China's economy grew 9.5 percent last year and the U.S. expanded 4.4 percent, the most since 1999. Russia's economy grew 7.1 percent because of rising oil, natural gas and metals prices, the government estimated on Feb. 2.

Draining Inventory

Consumers have relied on stored metal as production lags demand. Inventory in LME warehouses has slid 88 percent since the start of 2004 to 53,975 tons, less than two days' global use.

Mining companies like BHP, Chile's state-owned Codelco and Phoenix-based Phelps Dodge Corp., the second-largest

Mick100
03-03-2005, 10:35 AM
Crude oil outlook for 2005 - Matt Simmons

http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=2486&MONTH_YEAR=Feb-2005

Mick100
03-03-2005, 10:52 AM
Experts (Matt Simmomns) say Saudi oil may have peaked

http://english.aljazeera.net/NR/exeres/80C89E7E-1DE9-42BC-920B-91E5850FB067.htm

,

Mick100
04-03-2005, 12:26 PM
Investors watch rising energy costs


--------------------------------------------------------------------------------
The Paris-based International Energy Agency's recent pessimistic update about the world's oil supply/demand inversion set off global alarm bells. This was a major turnaround from a previous projection issued by the respected international agency before the end of last year.
With the IEA trumpeting increased global demand, combined with a cutback in non-OPEC production, the New York Mercantile Exchange oil traders returned per diem oil prices back to the high 40's per barrel. Only two months ago, oil prices had retreated back to the $40 per barrel range. The early winter weather in the Northeast was exceptionally mild, and it looked as if oil prices in the 30's were only a matter of time.

The timing of the IEA announcement was particularly ominous as the first quarter has historically proven to be the weakest in demand, coming between peak heating demand and the multi-month driving season.

This turn of events also did not go unnoticed by the equity markets' natural resource partnership, whose stock prices were driven to all-time highs, in an attempt to lock up future oil and natural gas availability, with prices projected to climb even higher.

OPEC, which is responsible for 35 percent of global oil exports, has shown no predisposition to loosen its quotas once again. Although cracking down on quota cheating after Jan. 1, the predominantly Middle East oil monopoly has signaled the possibility of further tightening at its mid-March meeting, scheduled for Teheran, Iran.

In effect, OPEC has taken off the mask of keeping prices down to accommodate global economic growth. Its spokesmen have lately "legitimized" price per barrel in the $50 range, due ostensibly to higher costs of production and the weakness of the dollar - the currency of all OPEC transactions.

The outlook for new arenas of oil production continues to deteriorate. In fact, depletion of existing sources are outstripping additional finds at an accelerating pace.

This phenomenon is best manifested by the behavior of the world's 10 biggest oil companies, which grew out of the mega-merger mania of the 1990s. Despite earnings of more than $100 billion last year on sales exceeding $1 trillion, not much of this unprecedented largesse is going into new exploration.

Despite a growing possibility that oil prices will remain high throughout 2005, the bulk of this all-time largest cash hoard is expected to go into mundane business commitments, such as stock buy-backs, dividend increases, and infrastructure strengthening, rather than expanding drilling activities. Even capital expenditures are being drastically cut back.

This has less to do with price risk aversion than too much money chasing too few exploration opportunities. This dilemma is complicated by many of the global oil-producing nations prohibiting partnering with the global multinationals.

Saudi Arabia, the world's No. 1 oil producer, is a good example. With rapidly aging oil fields and a deteriorating energy infrastructure, the Arab kingdom has demanded unacceptable terms from its former ARAMCO partners and is continuing to rapidly deplete existing reserves. Promises of Saudi reserves exceeding 500 billion barrels are increasingly labeled as pipe dreams by knowledgeable geologists. The same is true of repeated promises to pump 12 million to 15 million barrels a day.

Mexico, which had most recently discovered large offshore fields deep in the Gulf of Mexico, doesn't have enough money to even secure the sonar equipment necessary to confirm these finds. With 90 percent of its oil revenues confiscated by the government, Mexico is hamstrung by a law that does not permit non-Mexican partnerships.

This was part of a law passed in the late 1930s to make PEMEX, the national oil conglomerate, independent of extra-national influence.

The ongoing acquisitions and global energy partnership-building by China and lately India, also pose a dangerous restriction to U.S. av

Mick100
05-03-2005, 02:24 PM
Commodities and gold -Steve Saville

"In our opinion, what is presently underway is a final blow-off to the upside in the prices of some commodities and many commodity-related equities. It's impossible for us to confidently predict how much further these moves will go before the inevitable downturn gets underway, although our guess is that major peaks will be in place before the end of March. What we can say with confidence is that the decline that follows the speculative blow-off will take back all gains achieved during the blow-off stage plus a lot more. For an indication of what is likely to happen in some other sectors following the current blow-off take a look at what happened to silver and silver shares during March-May of 2004."


full article at:

http://www.gold-eagle.com/editorials_05/milhouse030305.html


,

Mick100
08-03-2005, 09:53 AM
Metal prices set to rise:

http://www.theglobeandmail.com/servlet/story/RTGAM.20050306.wmetals0306/BNStory/Business/

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skinny
08-03-2005, 10:11 AM
Mick, read the article below on the way home tonight.

Seems a pretty credible call that steel prices at least may be heading for a fall.

http://news.ft.com/cms/s/0040aea2-8e87-11d9-8aae-00000e2511c8.html

Mick100
09-03-2005, 11:12 AM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Copper Rises to 16-Year High in New York and a Record in London Listen
March 8 (Bloomberg) -

Copper prices rose to a 16-year high in New York and touched a record in London on expectations that production of refined metal from the world's smelters will lag demand through June.

Smelters aren't boosting output because some are shut for maintenance, Merrill Lynch & Co. said today in a report. Inventory monitored by the London Metal Exchange has plunged 80 percent in the past year. World supply is equal to three weeks of demand, down from more than six weeks in early 2003, said Jon Bergtheil, an analyst at J.P. Morgan Securities Ltd. in London.

``Anything below four weeks is still a danger zone,'' Bergtheil said. ``There is no doubt that copper is extremely tight in the first half of the year.''

Copper futures for May delivery rose 1.85 cents, or 1.2 percent, to $1.515 a pound at 10:12 a.m. on the Comex division of the New York Mercantile Exchange, after reaching $1.521, the highest since March 6, 1989. Prices are up 17 percent in the past year.

On the London Metal Exchange, copper for delivery in three months rose $43, or 1.3 percent, to $3,287 a metric ton. Prices reached $3,296, the highest since the contract began trading in its current form in 1986.

The copper rally is part of a surge in commodity prices, which are at their highest in 24 years. The Reuters-CRB Index of 17 commodities jumped 7.1 percent last month, the biggest monthly gain since August 1983. The index is up 14 percent in the past year to 310.93 today, the highest since Jan. 1981.

``Everybody wants to be long of commodities,'' said Stephen Briggs, an analyst at Societe Generale in London. Hedge fund managers ``think that the potential returns in commodities are still very high.''

Phelps Dodge, BHP Billiton

Shares of Phoenix-based Phelps Dodge Corp., the world's second-largest copper producer, rose $1.06, or 1 percent, to $107.61 in New York Stock Exchange composite trading. The stock is up 30 percent in the past year.

Melbourne-based BHP Billiton, which owns the world's biggest copper mine, Escondida in Chile, today offered to buy WMC Resources Ltd. for A$9.2 billion ($7.3 billion) in part to help supply more copper and nickel to China.

China surpassed the U.S. in 2002 as the world's largest copper consumer.

``We feel quite optimistic about China,'' BHP Chief Executive Officer Chip Goodyear said in a conference call. BHP would displace Phelps Dodge as the world's second-biggest copper producer. Santiago-based Codelco, owned by Chile's government, is the world's largest producer.

Global copper consumption will rise 3.5 percent to 17.3 million metric tons this year, exceeding supply by 190,000 tons, said Jon Bergtheil, an analyst at JPMorgan Securities in London.

Weaker Dollar

Hedge funds and other speculators that hold at least 100 copper contracts have increased their holdings in the futures for the past three weeks amid speculation that declines in the dollar would boost global demand for the metal. The dollar fell against the euro today.

``The weaker dollar helped spur renewed speculative buying which propelled prices higher,'' said Marc Morgan, a trader at Triland USA Inc. in New York.

Copper prices have almost doubled in the past two years as demand surged in China, the U.S. and Japan, the top three users of the metal.

Price gains now are ``consistent with seasonal tendencies for copper, which often posts significant highs in late March or early April,'' said Tim Evans, an analyst at IFR Markets in New York. ``With low inventory levels this time around, that seasonal peak should run somewhat later than normal rather than earlier.''

U.S. refined metal stockpiles at refineries, wire-rod and brass mills and exchanges fell in November to 137,000 tons, down from 656,000 tons at the end of 2003, the Interior Department's Geological Survey said in a report today.

A futures contract is an obligation to buy or

Cooper
11-03-2005, 09:57 AM
An argument for your continued shortage, Mick....


DJ INTERVIEW: Labor Shortages Shackle Australian Miners

This interview first ran around 0745 GMT

By Ray Brindal
Of DOW JONES NEWSWIRES

CANBERRA (Dow Jones)--At a time when Asia's appetite for raw materials remains
voracious, Australia's mining sector is facing unwanted challenges from higher costs
and chronic labor shortages.
These problems are now "a constant theme" in the industry, said Mitchell
Hooke, chief executive of the Minerals Council of Australia lobby group.
Capacity constraints reach beyond difficulties finding skilled and professional staff
such as electricians, toolmakers, and metallurgists.
"You can't get trucks, you can't get tires," Hooke told Dow Jones
Newswires, with other industry analysts adding explosives are in short supply.
Echoing a point made by the conservative government in recent days, Hooke cautioned
that supply issues need to be kept in perspective. Miners and companies in related
industries would rather be confronted by cost and labor pressures during a period of
booming sales rather than when the cycle is at a low point and balance sheets are
stretched, he said.
The investment boom, fueled by record prices for many mineral and energy products and
pushed by strong demand from China, isn't about to implode, say analysts.
More likely, some marginal projects will be shelved and development schedules for
others will be delayed, while many developers are also reworking project parameters.
Australia is a major global supplier of many mineral and energy products such as coal,
iron ore, base metals and liquefied natural gas. Slowing investment growth in the mining
sector could be something of a light dab on the brakes for the local economy, which at
this stage is being pushed along by strong capital expenditure.
Hooke said project economics are being recast and many people are reworking numbers for
previously approved projects.
"I know of circumstances where that's happening," he said.
"I certainly see the skills shortages as limiting the extent of the investment
activity. It isn't doom and gloom, it's limits," he said.

Mick100
13-03-2005, 09:27 AM
The dragon is Ravenous - daily reckoning

http://www.financialsense.com/editorials/daily/2005/0311.html

,

Mick100
13-03-2005, 08:07 PM
CRB breakout - Adam Hamilton

An excellent read

http://www.gold-eagle.com/gold_digest_05/hamilton031105.html

,

dingdong
13-03-2005, 08:33 PM
Mick, how is the CRB calculated?

It was indeed an interesting read until the point that it mentioned that "I suspect that the greatest equity gains.... will occur in the elite ruling trinity of oil, GOLD, and silver producers."

Then I thought YAWN, it was just another bit of Gold Eagle propaganda in order to sell their book.

You would think they've never heard of coal, iron ore, nickel, copper, zinc etc etc in America.

Mick100
13-03-2005, 09:32 PM
"I suspect that the greatest equity gains.... will occur in the elite ruling trinity of oil, GOLD, and silver producers."

==============================

I think you can disregard that statement abdab. As far as I know, oil, silver and gold are only three of the 17 commodities which make up the CRB.


Mick

Mick100
17-03-2005, 08:19 PM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Copper Futures Rise to Record in London on Surging Demand
March 16 (Bloomberg) -- Copper prices rose to a record in London amid signs that China's economic growth is accelerating, boosting demand from manufacturers.

Copper for delivery in three months rose as much as 2.1 percent to $3,307 a metric ton on the London Metal Exchange, the highest since the contract began trading in its current form in 1986. The metal was up $65 to $3,303 at 9:40 a.m. London time.

Investment in China's factories, roads and power plants increased at a faster pace in the year's first two months. China is the world's biggest consumer of copper, which is used in electric cable, power lines and construction.

``Prices are too high and it's evidence that demand is surging,'' said Liu Songtao, a copper futures trader at Dalu Futures Co. in an interview in Beijing.

China's fixed-asset investment in urban areas rose 24.5 percent in the first two months from a year earlier after climbing 21.3 percent in December, the statistics bureau said today. That's more than the government's 16 percent growth target for this year.

``The data confirms that growth seems to be accelerating and investment in real estate especially, is still too hot,'' said Frank Gong, chief China economist at JPMorgan Chase & Co. in Hong Kong. He said the government may need to raise mortgage rates or taxes to cool property demand.

Copper for May delivery on the Shanghai Futures Exchange, the most actively traded, gained as much as 900 yuan, or 2.9 percent, to 32,170 yuan ($3,885) a ton, the highest since 1993. The contract rose 2 percent to close at 31,900 yuan a ton.

State Purchase

``A rise in demand from copper users boosted prices,'' Li Ling, a metal futures trader with Shanghai Jinpeng Futures Co., said in an interview from Shanghai. Copper purchases by the State Reserve Bureau also contributed, Li said.

Copper for immediate delivery rose to a record 32,900 yuan ($3,973) a ton yesterday in Shanghai. The State Reserve Bureau probably took delivery of 2,000 lots, or 10,000 tons, of copper from the March contract that expired yesterday, she said.

The bureau, which buys and sells commodities to adjust prices and supply, doesn't disclose details of its activities. Traders monitor the positions of Cofco Futures, which the bureau uses as a broker, to gauge the bureau's operations. Cofco Futures won't disclose the positions of its customers.

Industrial Production

China's industrial production rose 17 percent in January and February from 2004, after a 14 percent gain in December, the statistics bureau said yesterday. Industrial growth in China led a jump in global demand for metals, sending copper to a 16-year high last week.

``Over half of copper consumption in China goes into power industry, from develop things like power generators and transmission lines,'' said Chris Ding, a Beijing-based analyst with China International Capital Corp. ``Power shortage is still acute in China.''

Power producers are building generation plants to end shortages that caused blackouts in nine-tenths of the country this summer. China plans to spend 200 billion yuan ($24 billion) a year to build plants, adding capacity of about 35 million kilowatts a year for two decades, according to the National Development and Reform Commission, China's top planner.



To contact the reporter on this story:
Xiao Yu in Beijing at yxiao@bloomberg.net

To contact the editor responsible for this story:
Peter Langan at plangan@bloomberg.net.

Mick100
17-03-2005, 08:40 PM
OPEC says it has lost control of oil prices

http://msnbc.msn.com/id/7190109/

,

Mick100
18-03-2005, 11:12 AM
COBALT
Hybrid Gas Electric Vehicles

Go to page 11 of this report;

http://www.thecdi.com/cobaltnews/documents/Cobalt_News_July_04.pdf

,

skinny
19-03-2005, 03:51 AM
St. Pats interview with Jim Rogers below. Some key points:

* gold has the worst fundamentals of any commodity, lead metal is very solid ;)
* bullish on oil prices
* expects a crash in Chinese real estate this year and a dip in commodity prices
* sees this as a buying opportunity


An Interview with Jim Rogers - 3/17/2005



By Jim Rogers
March 17, 2005



In this KitcoCasey exclusive, we talk to Jim Rogers, author of the bestselling book “Hot Commodities” and pioneer of the Rogers International Commodities Index, a basket of 35 metals and industrial and agricultural products, which has risen more than 200 percent in value since July of 1998. Jim tells us why commodities are the best buy around these days, and outlines his strategy for profiting from the current bull market.

Jim, let’s start by talking a little bit about your approach to investing in the current commodities bull market. You’ve written that you take a long-term view – you find things with good fundamentals and then hold them. We’ve seen a bit of a consolidation lately in things like gold. Do you try at all to play those ups and downs?

JR: No. I’m a hopeless trader and a terrible market timer, so I don’t bother.

So you buy things that you plan to hold for some time?

JR: Until the basic fundamentals change. Then you get out.

What sort of timeline do you generally have on an investment? Years?

JR: Normally, yes. That’s the best kind of investment. The ones you don’t ever have to sell, because then you don’t have to pay taxes. There’s not many of them but they do occur occasionally.

You’ve written in your book “Hot Commodities” that you thought lead might be one such good long-term investment. Is that still the case?

JR: Well, I didn’t say I really liked lead. I was using lead as an example, as a teaching point, because in the commodities markets there are two factors that determine prices – supply and demand. Lead has lost two of its major demand sources – paint and gasoline – and yet despite that, lead is at an all-time high because the supply of lead went down much, much faster than the demand. I was trying to show that, people say, well, what if we have a recession? That chapter was designed to show that you can have recessions and slowdowns and you can still have a huge bull market.

Looking around today, are there any commodities that have especially good fundamentals?

JR: With commodities it’s like anything else – you want to buy the things that haven’t moved up yet. Orange juice and cotton and soybeans and sugar, these are places where you might start looking because they are down and there may be some fundamental changes taking place.

Of course we like all investment opportunities, but we’re particularly interested in the metals, where it seems like almost everything has moved up already.

JR: That’s right, everything has moved up. Conceivably palladium – it hasn’t moved up as much as the others. Conceivably silver. I own a little of both.

And as you say, lead is an interesting one.

JR: There’s no question that the lead market is solid. But again, that was just an example in the book, like gold. Yes, I own some gold and silver, but I think you’ll make more money in other things right now.

But you do see upside for all commodities in the long-term.

JR: There’s no question about it. This bull market still has several years to go. Nobody’s brought a new tin mine on-stream in the last year or two. The reason that bull markets in commodities last a long time is because it takes a long time to bring this stuff on-stream. Even with agricultural products. It takes a coffee tree five years to mature. It takes a rubber tree several years to mature.

What about gold? You’ve written that its fundamentals probably aren’t as good as other metals’.

JR: I own some gold. But, yes, I think I’ll make more money in other things in the meantime.

So, do you own gold more as a hedge against economic troubles?

JR: It’s an insurance policy, if nothing else. If the world suddenly comes to an end, go

Mick100
21-03-2005, 02:09 PM
Living in Interesting Times
by Justice Litle
Contributor, The Daily Reckoning
March 18, 2005


“Practical men, who believe themselves to be quite exempt from any intellectual influence,
are usually the slaves of some defunct economist.”
~ John Maynard Keynes

There is an old joke about economists barreling down the road in a car with a blacked out windshield, driving by way of rear view mirror. The analogy has deep roots. These days we are always looking forward to the future, but the ancient Greeks had a different perspective: they saw themselves walking backwards through time. Keenly aware of where they had been, past terrain offered the best guess as to what might be coming next.

As investors and traders, we look forward as best we can; acting in the present, informed by the past, taking calculated risks in hope of getting it right. To some degree we walk backwards like the Greeks, yet with a significant advantage: the awesome depth and breadth of our past. As Mark Twain noted, history never repeats but often rhymes. Perhaps the skilled investor has a bit of poetry in his soul.

But what’s the point if Keynes was correct? Do our views really matter if we are just slaves to some dead economist? Fortunately, Keynes was not asserting some form of mind control beyond the grave. His point was to highlight the astonishing power of ideas and beliefs, especially the ones that act as building blocks for our assumptions, color our perceptions on matters of great importance, and are typically ignored as commonplace.

Many of these key concepts are invisible, woven expertly into the fabric of our assumptions. They hide in plain sight, like Poe’s purloined letter. Most of us do not consciously tend to our core beliefs. Like the foundation of a house, we place great weight on them sight unseen.

Yet without a solid foundation to build on, the house –or in this case, the investment portfolio- will not stand the test of time. A poor foundation is no good for building wealth, and a shaky framework invites collapse. The more volatile and dangerous things get, the more important the foundation becomes. When the sky is blue and the sun is shining, mistakes aren’t all that costly. But when the waters are churning and the winds gathering, structural integrity becomes paramount.

There is a tongue in cheek saying attributed to the Chinese (but potentially of western origin): ‘May You Live in Interesting Times.’ That certainly applies today, as opportunity and danger roar forth like a pair of marauding lions. With two titans (China and the US) facing off, neither at clear advantage and neither able to withdraw, the stakes have never been higher for the global economy. Not to mention booming commodities, inflation heading to the fore, crude oil on a long march to triple digits, the world’s reserve currency in doubt, nuclear confrontation, political turmoil on multiple continents, old strategic alliances cracking up, new alliances taking shape, and unprecedented financial leverage –from hedge funds to mortgage lenders to consumers to central bankers- straining the system to near breaking point.

So: do we seize the day, or run and hide? Is this a doomsday forecast? Not at all. For some of us, the rapidly rising stakes are as much a call to action as a call to caution. The commodity bull, already an impressive beast, is still in very early days. The pace of development in Asia is bringing forth a sea change of incredible proportions, with incredible profit potential in tow. Skyrocketing energy prices are a driving force in the development of fossil fuel alternatives and innovative 21st century technologies, creating major investment opportunities. Precious metals have awoken from their long slumber. And so on.

This is where the value of core ideas and beliefs comes into play. Action and caution must strike a balance. We don’t want to turtle up and let a fortune pass us by… nor do we want to be reckless and rash. So how do we go about maximizing our advantage in these ‘interesting times’, while successfully avoiding t

Mick100
23-03-2005, 10:38 AM
China's voracious appetite for materials
Drives up prices in the West


SHANGHAI, China – From the Cloud 9 bar atop the world's highest hotel, a visitor can get a bird's-eye view of the world's largest construction boom, which has fueled price increases and market disruptions around the globe.

Just 15 years ago, the Pudong area of Shanghai consisted of little more than dilapidated housing and muddy patches of ox-plowed farmland. Now it looks like downtown Manhattan.

From Cloud 9's windows on the 87th floor, visitors can pick out some of Pudong's more flamboyant buildings: the Oriental Pearl, Asia's tallest TV tower, which is studded with glass spheres that house stores, restaurants and museums; the sprawling Opera House, with separate venues for folk music, Chinese opera, classical music and Western opera; and the Science and Technology Museum, one of the world's biggest, featuring an indoor rain forest and a 230-foot-tall geodesic dome.

And that's just one neighborhood in one Chinese city.

Each month, China needs to build the equivalent of a Houston or a Philadelphia just to keep up with population growth. Each year, Shanghai – about the geographic size of the city of San Diego but with 10 times the population – constructs or renovates 200 million square feet of building space, about the same amount as all the office space in New Jersey.

To fuel that boom, and to feed its hungry factories, China uses more than two-fifths of the world's annual output of cement, one-third of its iron ore, one-quarter of its lead and steel, and more than one-fifth of its copper, aluminum and zinc.

The country's unprecedented demand for raw materials has had far-reaching effects, helping drive up the price of raw materials last year and creating short-term shortages throughout the world.

When victims of the 2003 San Diego County wildfires tried to rebuild their homes, some were told the price of wood had risen because of demand from China. And when the Sweetwater School District in Chula Vista wanted to repair some of its facilities last year, it had a hard time finding cheap concrete because so much was being used by China.

"A number of factors affected construction costs and timelines, but not the least was the tremendous demand for concrete and steel from China," said Bruce Husson, Sweetwater's chief operating officer.

Partly because of the price increases in raw materials, Husson said, some contractors submitted bids last year for almost twice what the projects were budgeted for.

"We had to slow down a number of (contract) awards because we couldn't afford such exorbitant prices," he said.

To most consumers, perhaps the most visible effect of China's growing demand is the recent rise in worldwide oil prices, as an ever-increasing number of Chinese switch from bicycles to automobiles.

More than 2 million new drivers hit the roads in China last year – helping make China the world's No. 2 consumer of oil, after the United States – and the number of new drivers is increasing at double-digit rates each year.

"The unexpected demand from China helped push crude oil prices above $50 a barrel," said Joe Sparano, president of the Western States Petroleum Association. "You have a market of 1.3 billion people that has suddenly discovered the automobile."


Although China represents only 8 percent of the world's oil demand – compared with 25 percent for the United States – its thirst is increasing exponentially and represents 50 percent of the growth in the market.

Steel and concrete

China is not the only reason for last year's shortages and price increases. War, terrorism and political disruptions helped push up the price of oil. Hurricanes and plant consolidations also put a crimp on building materials. Renewed production by North American factories chewed into metal supplies. In California, the demand for construction materials was also driven by a spate of public works projects.

Unlike one-time events that roil the marketplace, China's demand for raw materials represents a

Mick100
25-03-2005, 07:10 PM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Tata Steel to Raise Prices to Record Starting April 1 (Update1)
March 24 (Bloomberg) -- Tata Steel Ltd., India's second- largest steelmaker, will raise prices for its products to a record starting April 1, to cover soaring raw material costs.

Hot-rolled steel coil prices for annual contracts will be increased by as much as 5,000 rupees ($114) a metric ton, Tata Steel Managing Director B. Muthuraman told reporters in Mumbai after a shareholder meeting. The price of hot-rolled coil, a benchmark steel grade, will rise to 29,000 rupees a ton, spokesman Sanjay Choudhry said.

Tata Steel and other rivals are raising prices as India's fastest economic growth in 15 years stokes demand for houses, cars and appliances, while surging demand in China, the world's biggest steel user, drive global prices to a record. Higher rates may help the company maintain growth in profit that has tripled in the past three years, investor Anoop Bhaskar said.

``Higher prices coupled with the growth in production volume will help maintain profit growth,'' said Bhaskar, a fund manager at Sundaram Newton Asset Management Co. He expects operating profit to rise 8.4 billion rupees in the year to March 31, 2006.

Outlook

Tata Steel may say net income rose 90 percent to 34 billion rupees in the year ending this month, according to a survey by IBES, a unit of Thomson Financial. Its ability to contain costs by mining its own iron ore, whose prices have surged to a record, may help the company beat forecasts, analysts said.

``Most of benefit from the price rise will get added to its bottomline since it is largely insulated from iron ore and coal price rise,'' Bhaskar said.

It costs Tata Steel about $200 to make a ton of hot-rolled steel, making the company one of the ``lowest-cost producers'' in the world, Standard & Poor's said today. Tata Steel plans to more than triple production to 15 million tons by 2010.

Japanese steelmakers will have to pay 1 trillion yen ($9.42 billion) more for raw materials next year, Nippon Steel Corp. President Akio Mimura said on Feb. 24.

Tata Steel shares, which have gained 80 percent in the last year, rose 1.2 percent to 413 rupees on the Mumbai stock exchange. Muthuraman spoke to reporters after trading had ended.

dingdong
26-03-2005, 01:21 PM
O Belgian of the Biscuits there were a couple of very worthy comments to be taken from the Jim Rogers interview:

Gold mine production has expanded nearly every year since 1980, when the bear market started. You don’t find that anywhere else that 25 years into a bear market, production is still expanding. In 2003, 75% of the money spent on exploring for metals was spent exploring for gold.

Small wonder the gold price is going nowhere.

The one I really liked was this oxymoron:

If the world suddenly comes to an end, gold will go up the most.

I certainly have my supply of gold bars squirreled away for when the world ends. I am comforted in the belief my gold will provide collateral in the afterlife.

Mick100
30-03-2005, 06:55 PM
Markets, across the board are getting hammered at the moment. The thing to watch for resource investors are the reports coming out of China. I just read another write-up on the commodties boom in china in the Press today. The mayor of the city, which the story was about (forgot the name), had said that his city would continue to expand at the current hectic pace for at least another 10 yrs. The journalist, who had obviously been there, decribed the place as one huge construction zone.

There are no indications of a slowdown in China whatsoever which means there is no need to panic for those people invested in resources. The bull market in commodities is still in force.
Bull markets never go staight up. Bull markets take two steps forward then one step back. What's happenning at the moment is a healthy correction in a long term bull market.


Mick

whiteheron
30-03-2005, 08:08 PM
Good comments Mick

The way to go , I believe , is with quality resource / commodoties / mining stocks that are producing or at the point of producing , keeping away from those that are not past the exploration stage as they are too risky and too far away from creating real value even if successful in their exploration activities

Mick100
30-03-2005, 08:52 PM
Exactly WH, One of my "rules of thumb" is not to invest in companies unless they have completed a BFS (Bankable feasibility study) If the banks are not prepared to put their money into a project then I'm not putting my money into that company. When the BFS is completed the decision whether to proceed with developement is made.

I must admit that I have broken my own rule this year (got a bit greedy) and bought two companies (SMM , CMR) which have not completed BFS. I'v already lightened up on one of those two companies today and will be watching them very closely.
The rest of my miners are either producing or at different stages of developement and will be coming into production in either 05 or 06.

Mick

whiteheron
30-03-2005, 09:48 PM
Mick

Our investment criteria is obviously very similar

Resource sector
Key component = BFS
Proven management
Financial backing from top banks / financiers
Producing or close to production
Location ( country and proximity to road / rail / shipping )
Financially sound
Low to medium cost of production
Reasonable mine life
Probability of further exploration / finds

These are the things that I look for --- the more of these that a company has the better

I am now looking to weed out my weaker stocks and replace them with those of better quality
This will mean less trading activity but a reduced exposure to volatility ( especially downward ) I believe

As a matter of interest I have been looking at gold , silver and base metal prices this evening
Gold and silver are not too flash at present but base metals are generally pretty strong , not much off their recent highs

I am a little unsure about gold although there is still room for a good profit to be made so long as production costs are in the low to medium range
Because silver is in supply deficit , has such a multitude of uses and such low worldwide stocks I believe that it will have a very rosy future

The demand for base metals must surely remain strong ( China , India etc ) and this will keep prices at a reasonable level at least , even if below the current levels
Efficient producers were able to turn a profit at prices around 50 % of what they are now so I see no cause for panic

Based on the above I will be sticking with top quality mining / resource / commodity stocks

Mick100
31-03-2005, 09:31 AM
Investment criteria - Resources

Yes WH, my criteria are very similar to yours however I had never got round to writing them down (formallising the criteria) which I have now done - made a copy of your list

I would include "country risk" on it's own rather than bundling it in with infastructure.

Cheers

Mick

Mick100
31-03-2005, 09:38 AM
By Kenneth J. Gerbino
March 29, 2005





I believe the base metal stocks are going to extend their bull market for a long time and well beyond the consensus "group think". There will be corrections along the way but I believe these stocks are going to surprise everyone over the next few years. My reasoning follows below.

I believe precious metal mining stocks should be in everyone's portfolio but I also think it is a good idea to have some exposure to base and other metals (copper, zinc, nickel, lead, chromium, aluminum).

In order to understand a major change that could take place in an investment sector one can gain insights from a major change that took place in another sector.

I remember twenty years ago when Intel was producing computer chips, which at the time had become like a commodity item. From 1985-1995, Intel sold for only 7-12 times earnings because of the then "commodity" aspect of chips and the fact the computer industry was at that time a cyclical industry. By 2000, Intel was selling for 60 times earnings because of the Internet, laptop and cell phone usage explosion (mega-trends creating a new electronic marketplace with a more sustained demand for chips). Even today, after the tech stock wipeout, Intel is still selling for 20 times earnings.

A similar usage explosion has now started in base metals. The corresponding new mega-trend is Asian and Indian base metal demand. Base metal stocks are now selling at only 5-8 times cash flow. Old time base metal investors are locked into the past thinking of the cyclical nature of the industry. Three billion Asian and Indian people say "no way". Any structural or sustained demand for these metals could increase cash flow multiples to 12-16 times or more. This has significant implications. It means that even if the prices of these base metals go down by 25-35%, because of the multiple expansions, the base metal stocks will still be buys.

Even with just 2-3% growth in Asia and India (current growth rates are 8-9%) a steady demand for resources will create a more sustained and structural market for these metals. A steady demand would change the "cyclical" aspect of base metal demand and this would be reflected in higher cash flow multiples and higher stock prices. Tight supplies also will help stock values.

The latest data from China shows that 82% of their capital spending is on housing and infrastructure (roads, power plants, railroads, sewers etc.). Even with only 2-3% growth, China's capital spending should be a long-term positive non-cyclical factor to metal demand, as these infrastructure projects will last for decades as huge rural populations enter their new economic world. In the more established economies, capital spending is more cyclical because people are buying cars and TV sets and washing machines based on the economy, which can go up and down. But newly industrializing countries do not stop building roads and power plants when their economies slow down.

Infrastructure projects are usually not cyclical since they have State backing and many times are not curtailed despite poor economic conditions. In the current age of debt financing and printing money by world governments, it would be hard to imagine politicians considering canceling a power dam or major highway because of a slowdown in the economy. It will not happen in China or in India. The projects in the U.S during the great depression and many projects in Asia during the Asian meltdown are good examples of large state projects that continued despite all. Therefore one can expect a robust demand for base metals for a very long time even with substantial slowdowns in India and Asia.

China will attempt to talk down their economic growth and try and get the hedge funds and speculators out of the metal markets so they can buy cheaper on world markets. But with 82% of their capital spending on housing and huge infrastructure projects any economic slowdown will still require a sustained demand for these metals.

Because of this change from a

Mick100
01-04-2005, 09:54 AM
A number of interesting articles, with references to China, on Joes Diner - FSO

http://www.financialsense.com/fsu/posts/dancy/diner.html

,

Mick100
01-04-2005, 09:02 PM
China to boost refining capacity by a third to handle booming energy demand

Tue Mar 29, 5:43 AM ET Business - AFP



BEIJING (AFP) - China, whose booming economy is expected to see record demand for oil this year, plans to expand its refining capacity by more than a third within the next five years, state media said.

By 2010, the country aims to add 100 million tonnes to its refining capacity, on top of its current nearly 300 million tonnes, the Xinhua news agency said, citing the China Petroleum and Chemical Industry Association.


"Fast-growing domestic demand for finished oil products has given full play to the surplus refining capacity that had lain idle for a dozen years," said Tan Zhuzhou, president of the association.


"It has been top of the agenda for the country's oil giants to develop and expand oil refining capacity," Tan said.


China processed a record 273 million tonnes of crude oil last year, up 13.7 percent from the year before, marking the fastest growth rate in three decades.


Boosting domestic refining capacity is a key element in China's plans for coping with its enormous appetite for energy and fits into a larger strategy to rely more on the country's own resources to the greatest possible extent.


"China has the potential to ease its reliance on foreign energy as it has vast oil and gas reserves," Tan said according to the Xinhua report.


Tan's remarks echoed a statement made by Foreign Minister Li Zhaoxing earlier this month saying China would rely mainly on domestic oil resources to fuel its economic growth.


Intensified exploration efforts helped the two biggest oil companies to locate nearly 850 million tonnes of oil reserves in the course of 2004, state media reported recently.


Consumption of crude oil in China, already the second-largest user after the United States, will jump to 320 million tonnes this year, an 11 percent rise over the 288 million tonnes used last year, according to earlier predictions.


A net importer of petroleum products since 1993 and of crude oil since 1996, China is reliant on overseas producers for one third of its supplies, a share that may rise as Asia's second-largest economy continues to expand.

Krustytheclown
02-04-2005, 10:38 AM
Very good thought centring articles Mick!
So Mick you are a buyer in oil producers or soon to be oil producers?

I am, and more than just NOG!
I like NOG for the oil&gas and coking coal....make sense to me and the NOG bull run is set to continue. Name another small player with three commodity boomers with exploration upside?

Gregor.

Mick100
02-04-2005, 11:28 AM
The fact that you have got oil interests other than NOG is good to hear Gregor.

I suspect many of the NOGers have all their eggs in one basket - NOG, which I don't think is a good idea no matter how good NOG's prospects look. NOG has performed well for me over the past two yrs and I am confident that this strong performance will continue for another 2-3 yrs.
NOG is not my best oiler and not my worst - it's somewhere in the middle of the pack.

I'm very bullish on resources, particuarly oil as well as gas (in the US)
The thing I'm concerned about at the moment with oil is that there would be a sharp spike in oil prices which would reduce demand and bring the whole thing crashing down. Ideally I would like to see prices rise gradually (20-30% per yr) so that the economies can adjust slowly and demand for oil will remain high.


Mick

Krustytheclown
02-04-2005, 01:03 PM
MICK we mostly agree!

So I hold some NEO/PPP/AWE on the ASX.

Bulk of Eggs are at this time in NOG....for the trilogy aspect!

Are you bullish on the gas discovery at Jack Hamar that is still under drilling by Neo, Opl and Neb in the gas hungry market region of California? I like this on much!

Gregor.

Mick100
02-04-2005, 02:17 PM
quote:Originally posted by gregoroius

MICK we mostly agree!

So I hold some NEO/PPP/AWE on the ASX.

Bulk of Eggs are at this time in NOG....for the trilogy aspect!

Are you bullish on the gas discovery at Jack Hamar that is still under drilling by Neo, Opl and Neb in the gas hungry market region of California? I like this on much!

Gregor.



Have not researched PPP or AWE
Have had a quick look at NEO and I found a company that was putting all their eggs in one basket.
They had a small producer in ozzy which they sold in order to fund their exploration program in the US.
ie, they sold a low risk asset to fund a high risk asset (don't like)

I'm not saying that they won't produce gas at jack hammer - they probably will with todays technology - fraccing etc
I just don't like the style of managment.
This company also has the "hype facter" like NOG, which ,IMO, is another negitive.


Mick

PS, my pick for 2005 is NDO

,

Cooper
02-04-2005, 04:46 PM
Nice post, Mick. Would appreciate that kind of contrarian wisdom on the NEO thread. I personally think the risk is reducing (apart from the as yet settled risk of low flow rates) as each announcement comes. But as I say, it would be good to hear your concerns re: NEO in full.

What is it about NDO which has caught your eye?

Krustytheclown
02-04-2005, 05:57 PM
Yes I did a little trading in NDO a few months back in the 5c range.
What do you like about them (they have put on a little weight....)so much?

NEO have bigger upside though if commercial declaration of this very encouraging gas find is firmed up.

Gregor.

Packersoldkidney
02-04-2005, 06:21 PM
Reckon NDO have a fair upside too, Gregor. Looks like they'll be getting some North Sea permits: plus they already have a 'bird in the hand' with Galoc. Nido have good, proven management.

Over the long haul I expect Nido to have bigger upside than Nuenco. Its funny we should be expecting news around the same time for both these 'oil juniors'. For Nido on Galoc funding, and for Nuenco on the testing program in Cali.

Mick100
02-04-2005, 06:40 PM
quote:Originally posted by Cooper

Nice post, Mick. Would appreciate that kind of contrarian wisdom on the NEO thread. I personally think the risk is reducing (apart from the as yet settled risk of low flow rates) as each announcement comes. But as I say, it would be good to hear your concerns re: NEO in full.

What is it about NDO which has caught your eye?


Coop, Gregor I had a quick look at NEO last Dec
My research on this co. is very limited so far, so I havn't really got any strong opinions either for or against this company (if I get time i'll have another look at it)

What put me off when I looked at it was the fact that they were in the proccess of selling their only producing asset - that's the point where I stopped researching this co.

IMO,the most important thing with these junior miners/oilers is the managment. The intentions of NEO managment is to find the big one - the company maker. But if your pouring all your resoures into one project the "company maker" may turn into a company breaker.
It all comes down to how much risk you can handle as an investor and when I done my research it looked too risky for me. As more favourable info comes to light the risk will reduce as you point out Coop.

Mick

Cooper
02-04-2005, 09:43 PM
Cheers Gents. Let me know what you think if you get to have a look at NEO Mick, your opinion would be valuable either way. Will have a wee look at NDO... looks like I'm a bit later than everyone else!


EDIT: As it stands at the moment Mick, flow rates for JH look to be the biggest concern for NEO, IMO... ie they may be so slow that feasibility is borderline. From the last announcement though I think flow testing is due within a matter of weeks, and things should be clearer then.

stolwyk
03-04-2005, 11:24 AM
From J Mauldin:

Extract:

The Demand for Infrastructure

"My good friend Jim Williams at the Williams Inference Center sent me the following note on the increasing demand for infrastructure throughout the world. By that they mean roads, bridges, railroads, airports, ports, canals and so forth. It is a brief piece that I think you will find interesting.

"China is using 55 percent of the word's cement. Chinese businesses and the Chinese government are on a construction boom. In 1989, China had only 170 miles of highways. By the end of 2003, the country had 18,500 miles of expressways. To build all these roads, the Chinese government spent $42 billion. The Chinese Ministry of Communications states their plan is to reach 51,000 miles of highway by 2008. The Chinese government is committed to putting down roads, just like the United States started doing back in 1956.

"The list of infrastructure China needs is more than roads. For example, the country has about one third as many railways as we have in the United States and about one fifteenth as many airports. But, China has four times as many people. China needs more railroads, airports, bridges, roads, parking lots, phone lines, electrical lines and power plants. The demand for this infrastructure is now.

"Growing demand from China promises a lucrative future for South Africa's iron ore and manganese companies - if they can find a way to move the metals more than 500 miles to the coastal ports. The problem is that South Africa's government-run company does not have enough capacity. More trains and tracks are needed.

"Brazil has a similar train problem. The Brazilian government is trying to help the country's most important railways overcome a transportation bottleneck that threatens export growth. The current overhaul aims to help sustain the break- neck growth of Brazil's soybean and iron ore exports to China.

"India's shabby infrastructure, seen as a key roadblock to wooing foreign investment, stands to get a major makeover under ambitious plans by the government in the country's annual budget unveiled in March 2005. Improving India's potholed highways, congested ports and erratic telecommunications and blackout-plagued service, is vital to keep India's economy powering ahead.

"The demand for infrastructure is not restricted to China and India. According to the American Society of Civil Engineers, U.S. roads, bridges, sewers and dams are crumbling and need a $1 trillion overhaul. As of 2003, 27 percent of the nation's bridges were structurally deficient or obsolete. Since 1998, the number of unsafe dams in the country has risen by 33 percent to more than 3,500.

"The U.S. government is aware of the infrastructure demand. The usually fractious members of the House of Representatives, this March, found something they nearly all shared: an appetite for millions of dollars for home-state road, bridge and transit projects. On a vote of 417 to 9, House members approved a $284 billion six-year infrastructure bill.

"Natural gas will become the preeminent fuel of the 21st century. Moving natural gas requires liquefied natural gas (LNG) terminals, special ships, regasification terminals, and lots of pipelines for distribution. As one energy executive put it, 'Supply is not the issue; it is the delivery of gas to the market.' Before this transition occurs, a world-wide infrastructure for natural gas, such as that now enjoyed by oil, must emerge."

Mick100
06-04-2005, 01:29 PM
Iron ore prices - China

http://www.iht.com/articles/2005/04/04/business/ore.html

,

Mick100
08-04-2005, 07:53 PM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Copper Trades Close to Record High in London on Supply Concerns

April 7 (Bloomberg) -- Copper was little changed close to a record high in London on investors' concern that demand in China, the world's biggest consumer of the metal, may exceed supply this year, further draining dwindling stockpiles.

Global copper stockpiles monitored from London, Shanghai and New York have declined 79 percent this year, according to Bloomberg calculations. Copper futures in Shanghai today rose to a record for a second consecutive day, on investors' expectations mining companies won't be able to boost output fast enough.

``The London Metal Exchange followed that obviously,'' said Maqsood Ahmed, an analyst at Calyon Financial in London.

Copper for delivery in three months rose $5, or 0.2 percent, to $3,290 a metric ton on the LME at 10:28 a.m. The contract has gained 14 percent in the past year, rising to a record $3,308 a ton on March 31.

Copper for deliver in June, the most actively traded contract on the Shanghai Futures Exchange, gained as much as 640 yuan, or 2 percent, to 32,580 yuan ($3,935) a metric ton. China's $1.6 trillion economy expanded 9.5 percent in 2004 and may grow 8 percent this year.

Prices also rose on speculation China's State Reserve Bureau may buy 10,000 tons of copper when Shanghai's front-month contract expires on April 15, said Huang Xiaotian, head of the copper department at Henan-based Golden Dragon Precise Copper Tube Inc., China's biggest tube producer.

The bureau, a government body that regulates supplies of commodities including copper and grains, probably bought 10,000 tons of copper in Shanghai in March to replenish its stockpile, said Shen Haihua, a Shanghai-based analyst at trading company Southwest Futures Inc. on March 16. The speculation also drove LME copper prices close to a record on the day.

Stockpiles

This week's speculation on the bureau's possible purchase of 10,000 tons came after stockpiles on the Shanghai Futures Exchange fell 24 percent last week to 16,327 tons, the lowest in more than seven years.

Inventories of the metal at warehouses monitored by the LME rose for a third day, up 450 tons, or 1 percent, to 46,625 tons, the exchange said. Gains were reported in Vlissingen, Netherlands, and Long Beach, U.S. stockpiles are still 74 percent lower than a year ago.

Other LME-traded metals other than nickel and tin rose. Aluminum added $4, or 0.2 percent, at $1,956 a ton; lead rose $5, or 0.5 percent, to $967; and zinc rose $10, or 0.7 percent, to $1,376. Nickel fell $125, or 0.8 percent, at $16,275 and tin was untraded at $8,055.



To contact the reporter responsible for this story:
Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net.

To contact the editor responsible for this story:
Stephen Farr at sfarr@bloomberg.net
Last Updated: April 7, 2005 05:52 EDT

stolwyk
10-04-2005, 04:44 PM
http://www.basemetals.com/

http://www.mineweb.net/columns/curve_ball/431302.htm

Kings of the jungle
By: Barry Sergeant
Posted: '08-APR-05 14:00' GMT © Mineweb 1997-2004



JOHANNESBURG (Mineweb.com) -- Leading globally-diversified resources stocks BHP Billiton and Rio Tinto have featured heavily over the past week in notes from investment bankers and stockbrokers’ analysts. The stocks were the subjects of several upgrades on both sides of the Atlantic.

The enthusiasm of analysts for the two stocks is notable, given that the broader resources sector, including energy, has maintained its leadership of global stock markets for some time. A number of investors are asking when resources stocks will peak out, not least on this week’s news from the World Bank that the global economic growth rate is likely to decline to 3.1% this year, from 3.8% recorded in 2004.

The extended broad rally in dollar commodity prices, which commenced early in 2002, has fueled a significant re-rating of the broader resources equity sector; BHP Billiton’s dollar stock price, for one, has almost trebled The world’s leading oil major, Exxon Mobil, currently boasts a market capitalisation of $389 billion, rating it as the most-valuable stock in the world, having overhauled a position long held by General Electric.

Outside the energy sector, BHP Billiton is by far the most-valuable resources stock, with a current market value of $90 billion. Rio Tinto holds second place ($51 billion), followed by Norilsk Nickel ($42 billion), Anglo American ($36 billion), Alcoa ($28 billion), and CVRD ($26 billion). Newmont rates as the most valuable gold stock, with a market capitalisation of $19 billion.

Given upgrades announced over the past week, analysts and investors appear to believe that the broader commodity cycle has some way to run. However, this was also the week when Merrill Lynch likened the boom in commodity prices and resources equities to the stock market bubble that burst in March 2000, when it became apparent that technology stocks, the drivers of the bubble, were a new kind of smoke and mirrors. By contrast, the commodities and resources equity bull market has produced very tangible evidence of physical output, and also enormous increases in profits, over the past two years or so.

As to specifics, on Thursday this week, Dresdner Kleinwort Wasserstein upgraded Rio Tinto to “buy” from “hold,” and added that the stock remained its “top pick” within the relevant peer group. DKW increased Rio Tinto’s stock price target to 2000 pence from 1900 pence, based on a “conservative” 10 times “peak cycle” earnings per share in 2006. The analysts believe that Rio Tinto is likely to generate excess capital of around 17% of current market capitalization over the next three years, “which could be returned to investors.” The stock was trading around 1738 pence in mid-day trade in London on Friday.

JP Morgan said it would maintain its “overweight” rating on BHP Billiton, with a 12-month target price of 810 pence (current price: 726 pence). DKW this week upgraded BHP Billiton from “hold” to “buy” and said that despite BHP Billiton's proposed acquisition of Australia’s WMC, BHP Billiton is likely to return about $5 billion to its shareholders during the next three years.

Canaccord Capital similarly upgraded BHP Billiton to “buy” from “hold,” and increased its 12-month target price to 800 pence from 650. Similarly, Morgan Stanley lifted its BHP Billiton price target to 800 pence from 780, and Rio Tinto’s to 1850 pence from 1800. Morgan Stanley also updated its commodity price outlook and concluded that these will remain “stronger for longer.”

In a special 24-page report JP Morgan said that, on balance, its view of commodity prices is closer to that of an extended cycle than to a normal one. “However,” stated analysts at JP Morgan, “recent fears over US inflation have made us realise that there is still a case for a normal price cycle.”

JP Morgan’s recommendation is to be overweight in BHP Billiton but to retain a neutral weighting

Mick100
20-04-2005, 11:38 PM
--------------------------------------------------------------------------------

China's Economy Grows 9.5 Percent, More Than Expected (Update6)
April 20 (Bloomberg) -- China's economy, which accounted for a 10th of global growth last year, expanded more than expected in the first quarter as exports and investment surged.

Gross domestic product rose 9.5 percent from a year earlier to 3.14 trillion yuan ($379 billion), matching the fourth- quarter's gain, the National Bureau of Statistics said in a statement released in Beijing. That exceeded the median 9 percent gain forecast in a Bloomberg News survey of 11 economists. Fixed- asset investment rose 23 percent.

Companies including Motorola Inc. and Quanta Computer Inc. are expanding factories in China to make cell phones and notebook computers for export to the U.S., Europe and Asia. Policy makers may raise interest rates or tighten lending curbs to prevent expansion picking up in the world's fastest-growing major economy, according to investors including Geoff Lewis.

``The government would not want to see GDP growth accelerate from here,'' said Lewis, the Hong Kong-based head of investment services at JF Asset Management Ltd., which holds $57 billion of mostly Asian assets. ``We might see that policy is tightened a little.''

The Shanghai Composite Index, which tracks yuan-denominated A shares and foreign-currency B shares on the city's stock exchange, dropped 15.79, or 1.3 percent, to 1184.11 at the 11:30 a.m. local time break.

Excessive Investment

``Investment is still too high and far exceeds the government's target,'' said Li Yan, who helps manage the equivalent of $3.62 billion with Harvest Fund Management Co. in Shanghai. ``There is pressure on interest rates to increase.''

Fixed-asset investment, which reached 1.1 trillion yuan in the first quarter, is ``too large,'' causing shortages of coal, oil, electricity and transport, said Zheng Jingping, a spokesman for the statistics bureau. New fees will be introduced to curb property speculation, he added.

Premier Wen Jiabao last year ordered banks to curb lending to industries including real estate, steel and autos after surging fixed-asset investment drove raw-materials prices higher and strained power supplies. Producer prices rose a record 8.4 percent in October and blackouts in 2004 affected 24 of China's 27 provinces and its four biggest cities.

Inflation averaged 2.8 percent in the first quarter, less than the government's 4 percent limit, and producer prices increased 5.6 percent, today's statement said. Real-estate investment rose 27 percent to 232 billion yuan.

Higher Rates

``Investment is still very strong,'' said Andy Xie, an economist at Morgan Stanley in Hong Kong. He predicts the central bank will raise its benchmark one-year lending rate to help damp industrial expansion.

The yield on China's benchmark seven-year government bond maturing in November 2011 was unchanged from yesterday's close at 3.90 percent at the midday break in Shanghai. The People's Bank of China lifted its key lending rate by 27 basis points to 5.58 percent in October, the first increase in nine years. A basis point is 0.01 percentage point.

Industrial production increased 16 percent to 1.44 trillion in the first quarter, today's statement showed. Exports rose 35 percent to $156 billion and the nation had a trade surplus of $16.6 billion, compared with an $8.4 billion deficit a year earlier, the customs bureau reported April 12.

Pegged Yuan

China accounted for 26 percent of the record $617.7 billion U.S. trade deficit last year, prompting U.S. Treasury Secretary John Snow to renew calls this week for an end to the yuan's peg to the dollar. American manufacturers say the peg, which enabled the yuan to track the dollar's 9.1 percent slide against the euro in the past year, gives Chinese exporters an unfair advantage.

Investors are betting China, which last year overtook Japan to become the world's third-biggest exporter, will allow its currency to appreciate. The yuan

stolwyk
22-04-2005, 09:53 AM
Dave Forest: Taking Stock of Zinc- April 21
http://www.kitcocasey.com/displayArticle.php?id=76

Mick100
23-04-2005, 10:51 AM
Oil prices on the rise

http://www.msnbc.msn.com/id/5612507/

.

Mick100
27-04-2005, 07:47 PM
Significant quantities of lead and cobalt are required in the production of hybrid cars

=============================

Hybrid Car Sales Soar in U.S. in 2004

Mon Apr 25, 7:30 AM ET Business - AP


By DEE-ANN DURBIN, Associated Press Writer

DETROIT - The lure of the Toyota Prius and other hybrid cars helped drive healthy sales of electric and alternative-powered vehicles last year, according to new data that shows the hybrid market has grown by 960 percent since 2000.


New hybrid vehicle registrations totaled 83,153 in 2004, an 81 percent increase over the year before, according to data released Monday by R.L. Polk & Co., a Southfield-based firm that collects and interprets automotive data.


Even though hybrids still represent less than 1 percent of the 17 million new vehicles sold in 2004, major automakers are planning to introduce about a dozen new hybrids during the next three years.


Lonnie Miller, director of analytical solutions for Polk, said federal and state tax credits for fuel-efficient vehicles have helped spur hybrid sales. More people also are buying into the idea that driving a hybrid is socially responsible.


"What's different about this than other types of vehicles is that hybrids are about what people want to give back and what they want to feel they're doing with their vehicles," Miller said.


Despite the arrival of Ford Motor Co.'s Ford Escape hybrid in showrooms last year, Japanese automakers continued to control the vast majority of the U.S. market, Polk said. Japanese brands accounted for more than 96 percent of the hybrid vehicles registered.


Toyota Motor Corp., which was the first automaker to commercially mass-produce and sell hybrid cars, continues to dominate the market. The Toyota Prius, which went on sale in the United States in 2000, occupied 64 percent of the U.S. hybrid market last year, with 53,761 new Prius cars registered, Polk said.


Toyota is on track to double Prius sales again this year. The company sold 22,880 Prius cars in the first three months of the year, more than double the number it sold in the first three months of 2004, according to Autodata Corp. Toyota has said it plans to produce 100,000 Prius cars for the North American market this year.


The Honda Civic hybrid was second with 31 percent market share. Honda Motor Co. also sold several hundred Accord and Insight hybrids, which each commanded 1 percent of the market.


Ford sold 2,566 Escape hybrid sport utility vehicles, or about 3 percent of the market, Polk said.


Automakers are introducing hybrid versions of several models this year, including the Lexus RX400h, Mercury Mariner and Toyota Highlander SUVs. General Motors Corp. and DaimlerChrysler AG already sell hybrid pickups, but the system they use is less fuel efficient.


Hybrid vehicles are powered by internal combustion engines but also are equipped with batteries that are recharged while driving and an electric motor to assist with power. They typically cost $3,000 to $4,000 more than traditional models.


Miller said hybrids could make up 30 to 35 percent of the U.S. market by 2015 as long as automakers remain committed to producing them and market to people who are passionate about driving them. While some analysts believe there's a limit to the number of consumers who will pay more for a hybrid, Miller said the cost of hybrids eventually will come down.


"Some people are thinking there's absolutely no reason that all vehicles shouldn't be hybrid. The technology is there," Miller said.


Polk said California was once again the top state for growth in hybrid vehicle registrations. More than 25,000 new hybrids were registered in California, a 102 percent increase over 2003. Virginia, Washington, Florida and Maryland rounded out the top five states for hybrid registrations, the same as in 2003.


___


On the Net:





R.L. Polk: http://www.polkglobal.com

Mick100
06-05-2005, 01:12 PM
An oil supply tsunami alert:

http://atimes.com/atimes/Global_Economy/GE04Dj01.html
,

Mick100
07-05-2005, 02:53 PM
Bloomberg News

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Oil Gains a Third Day as OPEC May Fail to Meet 2nd-Half Demand
May 6 (Bloomberg) -- Crude oil rose for the third day in New York on speculation OPEC and other producers may struggle to meet peak demand this year when refiners increase output of heating fuel before the winter.

The extra oil that producers can pump has ``decreased to dangerously low levels,'' Merrill Lynch & Co. strategist Francisco Blanch said in a report this week. OPEC's crude-oil production in April rose 0.9 percent to 30.07 million barrels a day, close to a 26-year high, a Bloomberg survey showed.

``If OPEC is having difficulties meeting current world demand during an off-peak demand period, will they be able to produce enough supply during the higher demand periods later this year?'' said Alan Herbst, a principal at New York-based Utilis Energy LLC, an energy-consulting firm. ``Traders have begun to focus their attention on the ability of U.S. refineries to produce enough heating oil.''

Crude oil for June delivery rose as much as 63 cents, or 1.2 percent, to $51.46 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was up 45 cents to $51.28 at 8:15 a.m. London time.

Yesterday, oil for June rose 1.4 percent to $50.83 a barrel, the highest closing price since April 28. Futures have declined 12 percent since reaching $58.28 a barrel on April 4, the highest for the contract that began in 1983.

Crude oil prices are more likely to fall than rise next week as U.S. inventories near a six-year high boost confidence that refiners will meet peak summer gasoline demand, a Bloomberg survey shows today.

Next Week

Twenty-two of 57 analysts and strategists, or 39 percent, predicted oil prices will fall next week, while 20, or 35 percent, said they will rise, the narrowest result for the weekly Bloomberg survey since February. Fifteen respondents forecast little change. Last week, 58 percent expected a decline.

World oil demand will rise 2.1 percent this year, with most of the increase in China and the U.S., the International Energy Agency, an adviser to 26 industrialized nations, said April 12. Daily demand will peak in the fourth quarter at 86.1 million barrels, the Paris-based agency said.

Saudi Arabia, the world's top oil exporter, increased oil output by 110,000 barrels, or 1.2 percent, to 9.45 million barrels a day in April, according to a May 3 Bloomberg survey. That's close to the April 21 output estimate of Saudi Arabia oil minister Ali al-Naimi April 21 of 9.5 million barrels a day. The country has capacity to pump another 1.5 million more barrels a day, he said.

`Run Faster'

``Asking the Saudis to pump more oil is like asking an athlete who runs at full speed to run faster -- the only way he can do it is by taking drugs,'' said Gal Luft, executive director of the Washington-based Institute for the Analysis of Global Security. ``Without the necessary infrastructure, the Saudis will be forced to pump huge amounts of water into their wells to increase reservoir pressure.''

The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, raised its production quota in March to help lower prices and swell global stockpiles before the fourth quarter.

Including Iraq, which is not restricted by a quota, the group produced 30.1 million barrels a day last month, according to the survey of oil companies, producers and analysts. In October, OPEC pumped 30.54 million barrels a day, the highest since 1979, based on U.S. Energy Department records.

OPEC has no more than 1 million to 2 million barrels per day that could be pumped, Algerian Oil Minister Chakib Khelil said on April 27.

Oil rose to a record $58.28 a barrel on April 4, on concern spare capacity may not be enough to cover supply disruptions caused by sabotage, labor or civil unrest in producers including Iraq, Venezuela and Nigeria.

On May 4, Venezuela's highest-ranking opposition deputy of the energy commission

Mick100
15-05-2005, 11:04 AM
Profiting From the Wall of Worry



By Doug Casey
May 13, 2005


www.KitcoCasey.com Email Article


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Profiting From the Wall of Worry
By Doug Casey

In this article, I want to address what stage of the market cycle resource stocks are in, why, what’s likely next, and what you should do about it.

For pretty much all my adult life I’ve been a speculator. That is to say, someone with an appreciation for the relationship between risk and reward, an appreciation far too many people clearly don’t share.

Take for example, ostensibly conservative investments such as money market funds and T-bills. To my worldview, these are just bad jokes being played on the masses. Piling all your assets into increasingly worthless paper paying next to no interest is the financial equivalent of a death of a thousand cuts, guaranteeing that a large swath of the nation’s senior citizens will spend their golden years sporting paper caps while tossing fries. My view is that, certainly in today’s world, it’s much more prudent to risk 10% of your capital with a prospect of getting a 1,000% return than risk 100% of your capital for the prospect of a 10% (or less) return.

This brings me to the current market in natural resource stocks, a sector in which I have been an active investor for over 25 years. That’s enough time to have witnessed all manner of cycles and market action. As is to be expected, in the early years especially, I made mistakes, most attributable to the hubris of youth. On one memorable occasion, the error was serious enough that I felt the need to spend a day in bed pondering the magnitude of my losses.

But most humans (politicians and most economists being the exception) learn from their mistakes, and I learned from mine. As a direct consequence, I have made considerable money in the resource sector. Certainly enough to retire and hang out in upscale locales for the rest of my life, if that were my wont. (It’s not… as you read this, I’ve just returned from a rock-kicking expedition to a developing gold play in the boondocks of Columbia).

Further, I’m convinced that if I were wiped out tomorrow, I could start with a small grubstake and recoup most of my losses in a few years’ time. In fact, I believe I could do it even if I was airdropped into the Congo, with no money at all. And so could anyone with an entrepreneurial spirit, who knows the difference between something’s price and its value, and understands how to balance risk and reward.

But there’s no need to do anything exotic, starting with nothing. A relatively small amount of money, skillfully deployed in the right market at the right time, can compound quickly.

With that in mind, perhaps the most critical thing for people now in resource stocks is to examine the nature of bull markets. Many believe that, since resource stocks have had such a big move since their absolute bottoms in the 2000-2002 period, the bull market is, if not over, at least long in the tooth.

I don’t think so. And the reason goes back to an understanding of the way bull markets work—at least major, secular bull markets. They generally have three stages: 1) Stealth, 2) Wall of Worry, and 3) Mania.


THE STEALTH PHASE
The best time to buy in any market is when shares can be purchased on the basis of value alone. Of course that’s generally only possible when nobody wants to own them because they’ve been so beaten up in the previous bear market. It’s then, when people are most bearish, that new bull markets are born—quietly, unbeknownst to almost anyone. That’s why I term the first stage the Stealth phase: It’s there, but nobody can see it.

In the case of mining stocks, the bottom came between early 2000 and mid 2002, when few investors were even aware that a market in resource stocks existed any longer. It was so beat up that many companies were selling for less than their cash in the bank. Every week, several would change their names, roll back their stock, and make themselves over as dotcoms, or China telecom parts di

Mick100
15-05-2005, 12:13 PM
FINANCIAL MADNESS

Justice Litle

China presents two stories at once. In the long run, the dragon's rise seems inexorable. It's hard to imagine anything that could thwart it. In the short run, however, China must deal with dangerous internal weakness, namely a rotten banking system, poor internal controls and a dangerous torrent of "hot money" - speculative capital in pursuit of aggressive returns - that threatens to boil over the economy and unleash massive instability down the road when it withdraws, similar to the Asian currency crisis of the late '90s.

A divergence of opinion is slowly building as to whether China will make the full transition to free-market capitalism with its current political system intact. Naysayers believe that a top-down, statist approach to governance will never mix with free markets and that the conflicts inherent in China's uneasy arrangement will eventually tear the leadership apart...or bring about a violent end to free-market reforms...or both at the same time.

In contrast, optimists point to thriving countries like Singapore, where capitalism has flourished under the benign authoritarianism of Lee Kuan Yew and his protégées. (By the way, it's technically not illegal to chew gum in Singapore; you simply can't import or sell it legally.) They point out that an arrangement that appears statist and authoritarian is actually more democratic than it looks, because the people willingly endorse the arrangement. The tradeoff is stability for prosperity, and as long as prosperity is delivered, stability in the form of quasi-democracy will be accepted. The optimists see China's authoritarianism slipping away gradually - just as China's communism has transitioned from policy to rhetoric - and they see no reason why the transition cannot be carried further without a major dislocation.

Only hindsight will prove who is correct, but the stakes are high because of the global turmoil that would follow any political uprising. As of year-end 2004, China had more than $600 billion in U.S. dollar reserves. That is a sum that could effectively tear the financial plumbing system apart, if it were unceremoniously dumped on the markets with such massive pressure in a compressed period of time the pipes would surely burst. Of course, this would be fiscal suicide for the dumpers as well, which is precisely why such a move is not feared. China's own economy would be sucked into the vortex too, so why would the Chinese put a gun to their own heads?

The theme that applies here is the doctrine of mutually assured destruction, or MAD - but of the financial sort, rather than the nuclear.

A product of the 1950s, the doctrine of MAD essentially states that two parties with the capacity to destroy each other will recognize the folly of hostilities. We liquidate the Soviet Union, they liquidate us and nobody wins. So peace is assured, right? Wrong. The flaw in the theory comes in the form of a question: What happens if one side or the other is thrown into political turmoil, or if the reins are taken over by madmen with nothing to lose?

A Communist Party leadership on the edge of collapse would make a last-ditch bid for stability by any means necessary, which in turn would make it willing to contemplate the financial-Armageddon option, as a form of extreme blackmail, if its hand were forced. If the mandarins feared implosion, they would have the means to not just ask for extraordinary coordination from the United States and Japan, but to demand it... on pain of catastrophic consequences if they were allowed to fall.

But is this a point in favor of the optimists or the pessimists? Obviously, it's not a pleasant thought to imagine a breakdown in China's economy sparking massive civil unrest, in turn leading to a "hot war" with Taiwan as a means of distraction and a catalyst for unifying nationalism, which by extension draws in the United States and sets the stage for the grand finale: the financial equivalent of a hydrogen bomb going off as hostilities escalate out of control.

As a silver lining to t

Mick100
18-05-2005, 06:55 PM
--------------------------------------------------------------------------------



China's Industrial Output Rises 16%, Beats Forecasts (Update7)
May 18 (Bloomberg) -- China's industrial output rose 16 percent in April, faster than the highest forecast by economists, as companies including Royal Philips Electronics NV and Quanta Computer Inc. moved production to the nation.

The gain followed a 15.1 percent increase from a year earlier in March and exceeded the median 14.6 percent growth forecast in a Bloomberg News survey of eight economists. Production of computers jumped 69 percent, with laptop output more than doubling, according to Beijing-based Mainland Marketing Research Co., which releases figures on behalf of the government.

Overseas manufacturers are expanding in China to tap rising demand and take advantage of wages that the Asian Development Bank estimates are 4 percent those in the U.S. Chinese stocks fell after the report increased concern that Premier Wen Jiabao will tighten year-old lending controls in a nation that is the world's largest consumer of steel and second-largest user of oil.

The pickup in production reflects ``the structural story of China integrating into the global supply chain,'' said Tim Condon, head of Asian Financial Markets Research at ING Bank NV in Singapore. ``When you overlay that with the domestic boom, you have an unsustainably strong investment story.''

Condon's 15 percent production growth forecast was the highest in the Bloomberg survey, along with that of DBS Group. He estimates fixed-asset investment, which the statistics bureau is due to report tomorrow, rose 24.5 percent in April after increasing 26 percent in March.

Stocks Fell

China's industrial production reached a record 564.7 billion yuan ($68 billion) last month, with output of raw steel climbing 25 percent and that of cement gaining 9.6 percent. Steel and cement are among the industries targeted by the government's lending controls.

The Shanghai Composite Index, which tracks yuan-denominated A shares and foreign-currency B shares on the city's stock exchange, dropped 0.8 percent, to 1091.41 at 1:43 p.m. local time. The Shenzhen Composite Index, which tracks the smaller of the two Chinese markets, lost 1.1 percent, to 265.76.

``Economic growth is not slowing,'' said Li Yan, who helps manage the equivalent of $3.62 billion at Harvest Fund Management Co. in Shanghai. ``The government might need to do more to rein in expansion.''

China's economy expanded 9.5 percent in the first quarter, exceeding the government's prediction of a maximum 9 percent and the official 8 percent target. That pace of growth may be sustained this year, the Institute of International Finance said May 5, because foreign investment is foiling government efforts to rein in industrial expansion.

Hiring and Firing

Amsterdam-based Philips, Europe's biggest consumer- electronics maker, said April 20 its Chinese factories last year increased sales 20 percent to $9 billion, of which 60 percent came from exports. Chief Executive Gerard Kleisterlee, who has fired 50,000 workers since taking office in 2001, says the company will continue expanding and hiring in China, where it has invested $3.4 billion.

The company's sales in China grew by an annual average of 7 percent in the past two years, according to Bloomberg data. That compares with a 10 percent annual decline in the Netherlands, a 9 percent decrease in the U.K. and a 13 percent drop in the U.S. during the same period.

Moving to China

Industrial output in the U.S., the world's biggest economy, had the biggest drop in eight months in April, the Federal Reserve reported yesterday. Production in Germany, the U.K., France and Italy -- Europe's four largest economies -- fell in March, official figures show.

Quanta Computer Inc., the world's biggest notebook computer maker, said May 4 it will move mass production of the products to China and cut 800 manufacturing jobs in Taiwan to reduce costs.

``Moving production to China is the onl

Mick100
26-05-2005, 11:54 PM
Goldman Sach commodities index

http://www.gold-eagle.com/editorials_05/zihlmann052505.html

.

Mick100
27-05-2005, 12:58 PM
China's Oil Import Bill Surges 86% on Record Prices (Update3)

May 26 (Bloomberg) -- China spent 86 percent more in April to import oil than a year earlier, the Customs General Administration of China said, amid record prices. Higher costs may not damp the country's demand for fuels, refiners said.

The nation's bill for oil imports climbed to $4.66 billion last month, the customs administration said in Beijing today. During the first four months of this year, costs jumped 43 percent to $13.8 billion, it said.

China, the second-largest oil consumer, imported 22.5 percent more oil in April, with shipments reaching 12.3 million tons, to meet surging demand for fuels and chemicals. High prices for oil, which touched a record $58.28 a barrel in New York on April 4, may do little to crimp the nation's consumption, said Tian Chunrong, a senior engineer at China Petroleum & Oil Corp.

``High international oil prices have an impact on our import bills, but that has a minimal effect in deterring China's strong demand,'' said Tian, whose company, known as Sinopec, is Asia's largest refiner. ``Oil imports should continue to grow in the coming months,'' he said by telephone from Beijing today.

Oil for July delivery traded at $51.23 a barrel at 5:11 p.m. Beijing time.

Imports of oil in the first four months surged 4.4 percent to 41.9 million tons, customs data show. Fuel imports in April fell 42.6 percent to 2.5 million tons and declined 14.8 percent in the first four months to 10.8 million tons.

Economic Growth

China raised the volume of crude oil imports 35 percent last year as PetroChina Co., Sinopec and other domestic producers failed to meet demand as the economy grew at the fastest pace in eight years.

The rise in oil imports indicates that China's oil companies are processing more to meet domestic fuel demand and cutting purchases of refined products from outside the country, Tian said.

Crude oil exports in April rose almost seven fold to 1.2 million tons. For the first four months, exports climbed 34.7 percent to 2.5 million tons.

Coal imports in April rose 29 percent to 1.98 million tons and by 50 percent over the first four months to 7.4 million tons. Coal exports fell 18 percent in April to 6.4 million tons and declined 3 percent over the first four months to 26.5 million tons, the customs administration said.

Power Plants

China's coal demand has risen as power plants increase generation to meet the needs of an economy that expanded 9.4 percent in the first quarter.

The government kept this year's quota for coal exports unchanged at 80 million metric tons, after cutting last year's shipments from 93 million tons in 2003.

China reduced the tax rebate it pays coal exporters to 8 percent from 11 percent, starting May 1, to encourage domestic supply and stabilize prices, the nation's Ministry of Finance said on April 29.

China's April exports of coke, a fuel used in stoves and furnaces, rose 4 percent to 1.2 million tons. Coke exports increased 48 percent to 5.2 million tons during the four months.



To contact the reporter for this story:
Loretta Ng in Hong Kong at Lng13@bloomberg.net;
Xiao Yu in Beijing at yxiao@bloomberg.net.
Last Updated: May 26, 2005 05:24 EDT

Mick100
29-05-2005, 11:37 AM
SILVER STOCKS ON SALE
Sean Rakhimov
SilverStrategies.com
May 27, 2005

We learn from experience that men never learn anything from experience.
.................................................. .................................................. ..G.B.Shaw

Mining stocks are in the midst of a severe decline these days and it seems like there is no hope. The light at the end of the tunnel appears to be as dim as it’s as ever been and many think there is no light and there never was one. At least their actions assert that very outlook.

In most situations people know what they should do. They just don’t do it. We know that we need to sleep more, eat less, exercise regularly yet how many of us do it? On occasion we dab into “the right thing to do” area, but overall, we largely ignore this ageless wisdom and continue on doing what we do day in and day out. In retrospect we kick ourselves for being so hopelessly undisciplined. It happens time and again, over and over. And if that is how we behave in everyday life regarding things that are important to us, how can one expect people to be rational and do what they “should” in the stock market? After all is it not just a hobby, a kicker, something we do above and beyond our immediate needs, something that does not directly effect our present situation?

Ask anyone - what to do in the market - and chances are you will get a sound piece of advice: seek value, invest for the long term, don’t try to time the market, buy dips, don’t yield to hype on the way up or down, don’t follow the herd, buy low and sell high. Yet if you look in his/her brokerage account nine times out of ten you will see the opposite. How many of us actually do “the right thing”? How many of us follow those simple guidelines that we so easily and willingly impart to others? How many successful investors do you know? Are you one of them? This reminds me of a poker game when if in half an hour you don’t know who the dope is, you are it. Who is the dope in this resource market?

A friend phoned this morning to get my take on the markets. I actually went on to say that the only investor we commonly know is Warren Buffett (not personally, of course). Most everyone else is a trader, speculator or an outright gambler. Buffett purchased his silver in 1994 and has been sitting tight since. Do the math folks, that is 11 years! Storage fees only on 130 million ounces of silver over 11 years should amount to quite a sum. His formula is simple: find value, take a position and stay with it, not for a few weeks, months or years, but as long as necessary for the market to realize that value. That’s investing.

Incidentally, Buffett is known to say that “gold is a stupid investment because it earns no interest”, but we like gold and won’t hold it against him. After all, he is Warren Buffett, the king of value investing and we’re just die-hard silver bugs. Be as it may, actions speak loader than words. I was going to say that Buffett owns a ton of silver, but he actually owns many tons of it.

We spent two days at the NY Gold Show and report to you that our impression was that the whole show (exhibitors and attendees) was sliced in half as compared to last year or the year before. However when we talked to silver companies as we always do at these conferences, to our surprise several of them were quite happy with the public turnout and pointed out that while the quantity was on the lighter side, the quality was there. As it happens in all markets when times are good and stocks are flying high everyone wants be in the game and interest is abundant from all sorts of investors. When times are not so good – like now – interest from unsophisticated investors virtually disappears as they stage an exodus from these stocks. In contrast, sophisticated investors and others in the know, those who believe in the fundamentals of the silver story take out their check books and go shopping.

Even Bob Prechter was not able to scare off investors with his keynote presentation discussing the end of “bear market rally” in gold and

Mick100
05-06-2005, 08:50 AM
Shanghai Copper Futures Rise on Declining London Stockpiles

June 3 (Bloomberg) -- Shanghai copper futures rose for the third day after stockpiles in London fell to a 17-year low, adding to concern that global supply may lag demand from cable and wire makers in China and the U.S., the world's biggest users.

Stockpiles in warehouses monitored by the London Metal Exchange fell 67 percent in the past year to 43,225 metric tons, the lowest since May 1988. Inventories monitored by London, Shanghai and New York totaled 91,078 tons yesterday, less than two days of global consumption, based on Macquarie Bank Ltd.'s forecast of 17.37 million tons.

``The main reason for rising prices is the problem of stockpiles, which are just over 90,000 tons, while producers and traders are adding to inventories,'' Fang Xiangming, a metal analyst at Zhongcai Futures Co., said by telephone from Shanghai.

Copper for August delivery on the Shanghai Futures Exchange rose as much as 950 yuan, or 3.1 percent, to 31,350 yuan ($3,788) a ton. It traded 810 yuan higher at 31,210 yuan at 9:53 a.m. local time.

Copper for delivery in three months on the London Metal Exchange was bid at $3,173 and offered at $3,178 a ton at 9:53 a.m. Shanghai time from $3,179 yesterday.

On the New York Mercantile Exchange, copper for delivery in July on the Comex division fell 0.25 cent, or 0.2 percent, to $1.5140 in after-hours trade at 9:55 a.m. Shanghai time. The contract closed at $1.5165 a pound yesterday, the highest closing price for a most-active contract since April 11.



To contact the reporter for this story:
Chia-Peck Wong in Singapore at cpwong@bloomberg.net.

Mick100
11-06-2005, 01:49 PM
Bloomberg News

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IEA Raises 2nd-Half Demand Forecast, Straining OPEC (Update2)
June 10 (Bloomberg) -- The International Energy Agency, an adviser to 26 countries, raised its forecast for oil demand in the second half, signaling greater strains on OPEC's capacity to ensure supplies as consumption peaks in the fourth quarter.

Global demand will reach 86.4 million barrels a day in the fourth quarter, the IEA said in monthly report today, up 200,000 barrels a day from its prediction one month ago. That means the Organization of Petroleum Exporting Countries will need to pump 29.6 million barrels a day in the final quarter, 300,000 a day more than expected last month, the IEA said.

OPEC members ``are producing at close to capacity,'' Jeff Brown, the IEA's oil demand analyst, said in an interview from Paris. ``Hopefully by the end of the year the pressures that we see will ease.''

Oil futures remain above $50 a barrel as OPEC nations increase output to build inventories to ensure supplies are ample for use later this year. Traders are concerned about tighter supply during the Northern Hemisphere's winter months, when heating fuel consumption will peak, and constraints in oil- refining systems.

Brent crude oil futures for July settlement gained in London after the IEA report, and were up 26 cents at $54.08 a barrel at 10:05 a.m. New York oil was up 32 cents at $54.60.

The IEA left its full-year 2005 demand projection unchanged at 84.3 million barrels a day, as it raised both its third- and fourth-quarter estimates by 200,000 barrels a day and lowered the second quarter by 200,000 barrels a day. The IEA had raised its 2005 world demand estimate in four of its previous five monthly reports.

OPEC Capacity

The world's oil use will grow by 1.78 million barrels a day, or 2.2 percent, in 2005, which is slower than the 3.4 percent increase last year, which was the fastest in a quarter century. The agency will give its first forecast of 2006 demand next month.

The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil, decreased crude oil production by 55,000 barrels a day last month to 29.3 million barrels a day, amid lower output from the United Arab Emirates and Venezuela, the IEA estimated. Venezuelan crude production fell 40,000 barrels a day to 2.12 million barrels.

OPEC capacity at the end of the year will be 32.2 million barrels a day, the IEA said. About 700,000 to 800,000 barrels of daily capacity is still to be added to the OPEC system in the rest of the year, the IEA said.

``OPEC is pretty much producing at capacity,'' said Veronica Smart, an analyst at the Energy Information Centre, a consulting company in Newmarket, England.

``The Saudis have some spare capacity but that's sour crude and nobody really wants much of that'' because it's more difficult to refine, she said. ``The focus in the oil market is already on winter, and prices seem reluctant to fall.''

Some Oil Coming

The IEA said non-OPEC nations will help to boost supply.

``Potentially the market could ease a little bit later in the year, as there is more non-OPEC production coming online,'' the IEA's Brown said.

The combined crude-production quota for all OPEC members except Iraq was raised to 27.5 million barrels a day at an OPEC meeting in March, and members are considering whether to raise quotas further when they meet next week in Vienna on June 15. Actual crude production from those 10 nations was 27.51 million barrels a day in May, according to the IEA.

``A tacit acceptance remains in place within OPEC of the need to build inventories ahead of rising second-half demand,'' the report said.

Industry oil stockpiles in Organization for Economic Cooperation and Development nations rose by 13.5 million barrels in April and were 99 million barrels higher than a year earlier. They were equal to 53 days worth of demand, unchanged from the pervious month's report, the agency said.



To contact the reporter on

tricha
12-06-2005, 03:21 PM
Tight supply to extend copper's bull run

Fri June 10, 2005 6:06 PM GMT-04:00
By Robin Paxton

NEW YORK (Reuters) - High copper prices will extend into 2006, possibly hitting new records, but Chinese demand alone will not be enough to sustain the bull run in the industrial metal, a top industry analyst said on Friday.

Edward Meir, commodity analyst for Man Financial in New York, said the world would consume more copper than it produces in the third quarter of 2005 and the first two quarters of 2006, but there would be a surplus in this year's fourth quarter.

"Demand has been steady, but supply hasn't been keeping up," Meir told Reuters in an interview. He forecast an average copper price of $3,200 a ton this year for three-month delivery on the London Metal Exchange.

Next year, he said the average price would be $3,100. Consumption in China, which uses about a fifth of the world's copper for everything from electrical wires to air conditioning units, helped drive the price of the metal to a record high of $3,336 a ton in April.

China's demand is seen growing this year in excess of 9 percent, in line with forecast economic growth, but Meir said U.S. and European growth would also underpin copper prices.

"Most people are a little bit starry-eyed on China," he said. "When you're running a huge trade surplus like China is, you are dependent on other markets being strong enough to sustain your own growth."

Meir said the recent strength in prices was linked more to tight supply and London Metal Exchange warehouse stocks that have dwindled to their lowest levels in more than 30 years.

The end of a current round of interest rate hikes in the United States and a stronger U.S. economy from the second quarter of next year would also help copper prices, he said.

COPPER DEFICIT Meir forecast a global deficit of 11,000 tons of copper in the third quarter 2005, a surplus of 92,000 tons in the fourth quarter, and deficits of 7,000 tons and 37,000 tons, respectively, in the first two quarters of 2006.

"You're still getting supply shortages here and there, and demand is still strong enough to take in whatever extra production is coming in," he said.

There were few hidden stocks waiting to come into the market, he added.

"When you have a backwardation of $200 for three months, every pound of it is either used or pledged. I don't think anyone's sitting on hidden stocks," he said.

Backwardation occurs when the cash price exceeds the price for delivery at a future date.

But Meir said he had heard rumors that 10,000 tons of copper might arrive in LME warehouses within the next week, which would set back prices.

Of other metals traded on the LME, zinc had the most potential to rise further, Meir said.

"Zinc is a bit of a laggard. It's due to move higher," he said, predicting a deficit of the anti-corrosive metal for all of next year. Meir forecast an average three-month LME zinc price of $1,285 ton this year, rising to $1,350 a ton in 2006. The metal hit $1,450 on March 16, its highest since September 1997. On nickel, he forecast an average three-month price of $15,200 a ton this year and $14,700 in 2006.

Nickel is used to add strength and sheen to stainless steel. Demand for the metal is soaring in China, but Meir said it could be curtailed by any slowdown in Chinese stainless steel output.

tricha
12-06-2005, 03:32 PM
In my opinion, Why oil is King - but soon to be displaced by Uranium, simple isn't it! Cheers[B)][}:)]

P.S And why BHP stole WMC for a song! Uranium!
Is global oil production reaching a peak?
A few years ago only a handful of geologists and academics were considering such a possibility.

But now it appears even governments are taking a serious look at the subject.

The question is occupying more and more minds around the world.

It could happen soon.

A French government report on the global oil industry forecasts a possible peak in world production as early as 2013.

Don't mention it

The report 'The Oil Industry 2004' takes a long look at future production and supply issues.

But perhaps what is most interesting about this Economics, Industry & Finance Ministry report, is that it actually mentions a possible production plateau at all.

Even one year ago it was unheard of to find the subject mentioned amongst government ministries or financial institutions.

Now banks such as Goldman Sachs, Caisse D'Epargne/Ixis, Simmons International and the Bank of Montreal have all broached the subject.

"They are being forced to by circumstances," says Professor Richard Heinberg, author of 'peak oil' books Power Down and The Party's Over.

"They have relied on optimistic data and rosy outlooks that are being proven to be incorrect."

Nevertheless, some analysts disagree with the notion of any peak in oil production, also known as 'Hubberts curve', after the geologist M King Hubbert who first argued the case.

Deborah White, senior energy analyst at Societe Generale in Paris, says that "we have heard these arguments about 'peak oil' since the idea of Hubert's curve came into being.

"We don't endorse the idea at all."

'Peak oil' mentioned

And yet, the French report, perhaps the most open government dossier yet, questions the viability of long term oil production.

The report's second chapter 'Global Exploration and Production' runs a series of differing scenarios based on current forecasts.


Commuting from cities to the suburbs raises the odds

The scenarios differ according to projected demand increases, from 0% to 3% per annum, and possible new field discoveries, between zero and fifty billion barrels a year.

At a rate of 3% increase in demand per year and annual finds of 10 billion barrels, the ministry report states 2013 as "the time of maximum production or 'peak oil'".

That would mean the world's oil consumption would reach its highest point at around 97 million barrels per day (mbpd).

Forced to react

It is also very unusual to find a government report using the wording 'peak oil'. This is a phrase often used to describe the theory of a global oil production plateau, after which production would begin to decline.

Chris Sanders spoke at the recent Association for the Study of Peak Oil conference and is director of international finance consultants Sanders Research.

He believes 'peak oil' is major threat to modern economies.

"There is only so long politicians can ignore a geological problem, and it is a geological one," he says.

"Governments have had a great chance to take the lead on this situation, but they have not taken it. Now they are being forced to react.

"Why? Because it is very probable that we are nearing 'peak oil'."

The French report uses the phrase, in English, and repeats it on no less than four occasions.

Outdated data

The best case scenario the report lays out is rather far fetched, with a 0% increase in world consumption, at only 79mbpd, with annual finds of 50 billion barrels of new deposits per year.

That makes 'peak oil' arrive in 2125.


Supplying the world with oil is getting trickier by the day

Unfortunately the report's figures are already outdated. The world consumed 84.7 mbpd in the first quarter of 2005.

International Energy Agency (IEA) forecasts - traditionally regarded as conservative by the markets - p

Mick100
18-06-2005, 07:21 PM
Copper reaches record high

Funds move back into metals as supply tightens. Powerful quake in Chile heightens supply fears.
June 16, 2005: 3:50 PM EDT

LONDON (Reuters) - Copper prices touched record highs above $3,340 a ton Thursday as fund managers shifted back into metals markets dominated by tight supply.

Analysts said supply worries and shortages of material on the London Metal Exchange (LME), the world's largest non-ferrous metals market, cemented gains.

"Having set up new highs a period of consolidation would not be surprising," Basemetals.com's William Adams said.


"There's a chance to go higher above $3,350 after a brief period of consolidation, profit-taking and producer selling.

"However, from mid-July onwards there will be seasonal shutdowns for maintenance and with production increases due later this year we should see prices then ease."

Numis Securities analyst John Meyer said in a report: "Cash copper prices are perilously close to a staggering $3,550 a ton as (economic) data out of China supports our view of continuing strong manufacturing growth in the region.

"The market is awaiting the release of Shanghai (metals) inventory data on Friday to measure the impact of recent strong industrial activity."

A trader said: "Copper is onwards and upwards -- the market has been running short and they (shorts) have been caught on the wrong foot."

LME three-months prices closed at $3,317 after touching $3,343 at midday, but were still well up from Thursday's close of $3,287.

"Stops were triggered above $3,330/40 in copper and after this some profit-taking has weighed in, partly prompted by a reversal higher in the dollar," one LME broker said.

The dollar bounced higher in volatile, technically driven trade, recovering from an earlier dip on slightly soft U.S. data as questions about political integration in Europe took a toll on the euro.

In New York, COMEX July copper futures rallied to a new 16-year high on renewed fund buying.

Supply premium
The premium commanded by prompt delivery copper over three months delivery was at an 8-1/2-year high of $240 in London, with LME warehouse stocks of the metal falling 1,000 tons to 38,300 tons -- a level last seen in July 1974.

Total world stocks, held by producers, consumers, merchants and all market warehouses, are some 670,000 tons, equivalent to less than three weeks of demand.

At the start of 2004 world copper inventories were 1.5 million tons.

The LME spot premium echoed that scarcity of nearby supply. Typically the cash price is at a discount to reflect the cost of storing and financing metal for forward delivery.

"The real bottleneck is in readily available smelting capacity, which has restricted the availability of LME grade copper," Meyer said.

"While there remains some under-utilized smelting capacity in the world, much of this spare capacity is in relatively inaccessible locations."

Tokyo traders said fund managers might be reshuffling their portfolios after recent rises in long-term U.S. bond yields and only modest gains by Wall Street stocks.

The LME, along with precious metals and energy markets, posted strong price gains on Wednesday on the view that funds were shifting back into raw materials, traders said.

Supply fears
A powerful earthquake this week in the northern mining region of Chile, the world's leading copper exporter, had intensified worries about market supply.

Traders were particularly concerned by the closure of BHP Billiton Ltd.'s 115,000 tons a year Cerro Colorado copper mine in Chile, which remained shut overnight.

They are also mindful of the threat of labor action hanging over copper miner Asarco in the United States.

But BHP's giant Escondida Chilean mine was operating normally.

BHP Billiton and a buoyant mining sector led a bounce by Britain's top shares on Thursday on the back of strong Chinese industrial data, high base metals prices and positive analyst comments.

Aluminum prices shrugged off news that Norway's Norsk Hydro

Mick100
27-06-2005, 10:14 PM
THE "REAL" BOOM!

Puru Saxena
26 June 2005


Let us assume that an investor is looking for one asset, which he could buy and hold for the coming 10 years. This individual is extremely busy with his work so he does not have the time to closely monitor his investments on a regular basis. He is simply looking for an undervalued asset-class, which he could buy and forget for a decade without any sleepless nights. His plan is to invest his money in only one asset-class and he intends to cash in on the profits in 2015. So, which asset-class should this guy invest in? Should he buy US stocks, Asian stocks, perhaps bonds or even leave his funds in cash? Below, I provide my analysis of what he ought to be doing with his money.

But first, I want to start with an underlying philosophy. As an avid student of economic history, I have realised that all assets go through multi-year economic cycles commonly known as bull-markets (boom) and bear-markets (busts). These cycles surely follow each other as night follows the day. During a bull-market, an asset goes from depths of undervaluation to overvaluation. A bull-market usually ends with intense public participation, optimism and euphoria. On the other hand, a bear-market takes an asset on its long journey from extreme overvaluation to acute undervaluation. A bear-market usually ends with "blood on the street" or deep, dark despair. As a money manager, it is my job to identify, which assets are in a bull-market and those that are in a bear phase.

Looking back at history, it is now easy to see that if the above investor had to buy one asset in 1970 for the next 10 years, he should have bought commodities. For those who are not familiar, commodities went through an enormous boom during this period. Supply conditions were extremely tight, demand was rising and we also had the "Oil Shocks", which led oil to its all time high in 1980. During that period, the US economy was in a recession, inflation fears were running high and interest-rates were rising fast. The whole world was convinced that inflation would continue to escalate and that savings would eventually become worthless. Thus, everyone turned to hard, tangible assets to protect their wealth. The boom, which started off as a gradual bull-market (as they all do) erupted into an enormous mania in the late 70's as investors kept piling their cash in commodities whilst completely ignoring the prices they were paying. During the 70's, several commodities went up through the roof. Sugar went from 1.4 cents/pound in 1966 to 66 cents/pound in 1974 - a staggering rise of 45 times! Oil went from $2/barrel in 1973 to over $30 in 1980 and gold went from $35/ounce in 1971 to over $850/ounce in January 1980! Looking at the statistics now, commodities were an obvious choice in the 1970's but hindsight is always 20/20.

If our investor friend was looking for one investment theme in 1980 for the next 10 years, he should have bought Japanese stocks and real-estate. During that period, Japanese assets soared exponentially as the world became amazed by the "Japanese miracle". Money kept pouring in from around the world and the Japanese stock-market index (NIKKEI) rose from 6,500 in 1980 to 38,915 in December 1989. The future looked obvious: Japan's hardworking and focused society seemed unstoppable. In the 1980's, the Japanese economy was a sensation - the most dynamic economy the world had ever seen. Meanwhile, Japanese real-estate also surged. At the peak of the bubble in 1990, Japanese real-estate was worth four times the value of all property in the US! The Imperial Palace in Tokyo and the nearby park were valued more than the whole of Canada! So, it is obvious now that the land of the rising sun would have been the best option for investment purposes in 1980.

Let us now turn to the next decade - the roaring 1990's. During that period, our investor should have put all his money in American assets. During that period, the world's super-power came alive as the world fell in love with the US. As many will remember, the last decade s

Packersoldkidney
27-06-2005, 10:35 PM
Is 'Puru' their real name? Sounds like the alias of some bird on the phone sex line. Not that I'm into that sort of thing (ahem), just knew a few girlies at uni who used to have the odd alias as they were putting themselves through education by having some 'extra-curricular' money making ventures.

Not that I ever heard they also had an alias as an economic commentator: gawd! At uni, being a phone sex worker has more cred than being an economist!

Sorry Skinny! And the other economists hereabouts.

Mick100
27-06-2005, 10:47 PM
I'm not sure if the name's for real packers but I do know that the artical itself is definately a rehash of one of Marc Fabers interveiws published in 2002.

Alias's and plaugarism - what else are they teaching at uni these days.

,

Packersoldkidney
28-06-2005, 12:32 AM
He he, Mick. Having seen some recent uni work, I have an insight into plagiarism and university.

Hand in hand.

Still, thanks for the article.

Cheers.

diesel
28-06-2005, 09:05 AM
Rupert,

Peak oil theory is real and proven i.e. production within the USA peaked in 1972. Oil is a finite commodity, one day it will peak and then start to decline, I dont think any petroleum engineer would dispute that.

The problem is estimating when peak will arrive. The pessimists predict it will happen shortly, the USGS suggests it wont happen till around 2035.

Either way it is a real problem that most of us will have to deal with in our lifetime!

I suggest you read a few peak oil books and crunch some numbers yourself, the outcome I would hazard to guess is a retraction that peak oil is rubbish talk.

Mick100
28-06-2005, 12:23 PM
I'v been reading about this peak oil theory for 2-3 yrs now Rupert and I am a believer.

As deisel has pointed out the US oil production peaked in the early 70's which was almost exactly 40 yrs after discoveries peaked in the early 30's

World wide discoveries peaked in the mid 60's.
40 yrs has lasped since then and that is the main reason why so many are predicting that world peak production will occur during this decade.

Other reasons include:
-no giant feilds discovered in the last 35 yrs despite very high oil prices in the 70's - 80
-major oil co's are increasing their reserves by aquiring other co's (they are not finding new oil)
-increasing demand from developing countries (china, india)
-advances in technology are increasing rate of production from existing feilds but not increasing the total amount of oil that can be recovered over the life of the feild which will lead to speeding up the rate of depletion.

A world wide reccession, which would dampen demand, is the one thing that could delay peak oil for a number of yrs, IMO
Ironically, high oil prices would be the most likely cause of a world wide reccession.

,

Mick100
30-06-2005, 08:46 PM
By Niu Shuping
Wed Jun 29, 4:53 AM ET



BEIJING (Reuters) - China will produce far more steel in 2005 than previously forecast, generating an unexpected surplus almost as big as the national capacity of Germany, estimates from a top agency showed on Wednesday.



Slowing growth in domestic steel demand, mainly from the property sector, was responsible, said the State Council Development Research Center, the cabinet's think-tank, spelling bad news for global steel makers dreading a tide of Chinese exports.

But the surplus is not going abroad just yet. Exports and imports would be about balanced, the think-tank said.

China, the world's largest steel maker and consumer, would produce 348 million tonnes of steel products in 2005, 17.7 percent more than last year, it said in a report carried in the China Securities Journal.

Demand would grow 10.2 percent to 305 million tonnes. The surplus, 43 million tonnes, compares with Germany's 2003 crude steel output of 45 million tonnes.

The think-tank's output forecast was well above the February estimate from the official China Iron and Steel Association, just over 300 million tonnes.

Giving that estimate to Reuters in February, association chief Xie Qihua forecast no surplus: demand would be about the same or even a little more than output.

But the think-tank said: "Demand from major steel-consuming industries keeps on growing steadily, but the growth will slow."

The surplus had pressured domestic steel prices in the second quarter of the year and steel prices would continue to fall in the short-term.

The association said prices for some steel products had fallen so far that they were now below cost, and that could curb steel production in the future months.

"There are still lots of uncertainities in the coming months," said Li Shijun, a deputy secretary-general of the industry association. "Some mills will stop producing if steel prices keep on falling."

BREAKING EVEN

Li said mills producing long products, typically used in construction, were only breaking even.

Nine major steel mills, including Baoshan Iron and Steel Co. Ltd., the country's biggest, asked the government on Sunday to limit imports of low-end steel products.

They also urged the industry to support prices by increasing inventories and doing maintenance, interrupting production.

The association said last week that prices of some steel products in the second quarter had been as much as 20 percent lower than in the first. Production in the first five months of the year had basically matched demand, it added.

Government controls over fixed-asset investment and property had hurt steel demand, the think-tank said.

Ship-building, container making as well as the railway sector were major contributors to the growth, it said.

"Construction, home appliances and most machinery-building industries will continue to sustain steady development but the tendency for growth will slow down."

Imports of iron ore, the raw material to make steel, would rise 25 percent to 260 million tonnes in 2005. Domestic production of iron ore would hit 300 million tonnes, it said without giving comparative figures.

The report said imports of steel products were likely to fall 26.8 percent to 21.34 million tonnes while exports would increase by 45.7 percent from the year-earlier period to 21 million tonnes.

China was a net steel exporter in November and December last year, but it has yet to become a net exporter on an annual basis.

Mick100
30-06-2005, 08:55 PM
By KELLY OLSEN, AP Business Writer
Wed Jun 29, 4:27 AM ET



SEOUL, South Korea - Surging oil prices could curb Asia's economies, with some analysts predicting the fast-growing region — heavily dependent on oil imports — could slip into a recession if prices don't recede.



With oil prices about 50 percent higher than a year ago, the warnings are starting to mount.

South Korea's central bank said higher crude prices could shave 0.7 percentage points off economic growth this year and raise consumer prices. The Philippines has warned of a "heavy toll." Officials in Japan, the world's No. 1 oil importer, and Malaysia are voicing concerns.

"High oil prices are already weighing on growth in Asian economies," Andy Xie, economist at Morgan Stanley in Hong Kong, wrote in a report this week. "If oil prices do not recede, Asia could slide into recession in the short term."

After rising to a record close of $60.54 a barrel on Monday, crude oil prices fell back some, granting the region's importers a reprieve. In Asian trading Wednesday, light, sweet crude for August delivery was down a cent at $58.19 a barrel on the New York Mercantile Exchange, but traders said prices could easily test the $60 mark again.

Asia's heavy reliance on oil imports, mostly from the Middle East, means higher crude prices quickly translate into higher costs for a wide range of companies, from airlines and steelmakers to computer makers and fisheries. Consumers will also have to divert more of their spending to cover higher utility and gasoline bills. The overall effect could seriously restrain economic growth.

Also, Asian oil consumers have had to pay slightly higher prices because there is less competition among suppliers than in other parts of the world. This so-called "Asian premium" can run as high as $1.50 a barrel.

But the region's economic diversity — ranging from industrial behemoths like Japan, South Korea and China to smaller economies like Singapore and Hong Kong and advanced consumer societies like Australia __ means the oil price impact can vary substantially.

Officials in Malaysia, where dozens of electronics companies have factories, are worried that high fuel prices could slow gross domestic product growth to 5-6 percent this year from 7.1 percent last year.

Likewise, growth in South Korea, home to a booming tech sector, could decline from its previous projection of 4 percent this year, the Bank of Korea warned Tuesday.

Philippine President Gloria Macapagal Arroyo said the oil spike threatens "to take a heavy toll on the entire nation."

While those economic projections are far from suggesting a recession, economist Xie warns that the impact of higher Dubai crude, an Asian benchmark, can already be seen in Thailand and South Korea.

Thai Prime Minister Thaksin Shinawatra on Monday said that " GDP will definitely be affected by the oil price rise."

Export-dependent Singapore and Japan appear to be more concerned about the fallout from a global slowdown triggered by higher energy costs. Singaporean officials predict economic growth of between 3-5 percent this year, down sharply from nearly 8.5 percent in 2004.

"There may be a gradual indirect effect on the Japanese economy," Chief Cabinet Secretary Hiroyuki Hosoda, the top government spokesman, said recently about the oil price hikes. "We are worried there may be a major negative impact on the world economy."

Japan's suffering from past oil crises has forced the nation to become more fuel-efficient, with factories making fuel conservation a priority to lower production costs and consumer electronics manufacturers hyping the energy-saving merits of their air conditioners, refrigerators and washing machines.

And while surging oil prices certainly aren't welcome at a time when Japan is struggling to emerge from a decade-long slump, some automakers speculate that the turn of events could boost interest in their new fuel-efficient cars.

China, however, is cushioned by its state-owned oil companies from most swings in world oil

Mick100
01-07-2005, 08:24 PM
MUSICAL CHAIRS
by Mike Hoy
June 30, 2005


We have entered what I feel to be, a very interesting time period in the precious metals and natural resource markets. Never have I seen so many companies reporting such excellent results from their work programs and getting absolutely no respect in the market.

I attribute this to two basic reasons; (1) the market is limited in the supply of new capital available to invest in these stocks and (2) the potential buyers of these stocks have absolutely no motivation to bid them up.

The opportunities are real but the supplies of available funds are strictly limited to what the players already have committed in the market. There is a big reluctance on the part of investors to commit new money as they are not at all pleased with the returns of their current investments. This is like playing musical chairs where the players are there but nobody is stepping up to the plate until they feel they absolutely have too. They are all going around in circles doing very little because of the poor returns, performance and lack of liquidity in what they already own; in short they have no desire or motivation.

As a result of investors lack of funds or reluctance to commit new funds we are seeing the market eat itself up from within. We are seeing investors pruning their portfolios of, what they feel are the weak or undesirable stocks, in favor of the new stocks they want to own. The problem with this is the fact that the bids are lacking to give them the liquidity to sell without driving the price of the stocks down. This is giving the market, in whole, a downward spiral where the basic fundamentals for owning stocks are taking a back seat to the fact that many stocks are being sold strictly because they offer the owners liquidity in which to use to purchase these new ventures. In other words we are seeing investors part with their better quality stocks because those are the stocks that they are finding bids and liquidity in. The ironic part to this is the fact that this selling is keeping a lid on the stocks that should be going up.

Leadership is terribly lacking in this market as stocks in general are not advancing in relation to the positive news that the companies are releasing. When companies are releasing news on drilling programs where the results are exceptional and the stocks barely make a sustainable move forward; I have to wonder what the trigger will be to change the lackadaisical nibbling buying habits of timid investors to the bold venturesome risk takers that will inevitably emerge at the end of this malaise. In the not-to-distant future, stocks will again begin to react to the positive news releases and investors will be very surprised at what they have missed out on. Kind of like being the only one without a chair when the music stops.

Frustration and lack of faith are the predominant and guiding ingredients that are ruling the roost today. Some investors are tired, bored, frustrated or simply do not care. I feel sorry for these people because I feel they are missing one of the greatest opportunities to load up on stocks at prices they may never see again.

As for me, I have identified several stocks that I want to take positions in and I am putting bids in below the current market price and building positions as shares come along. It is very difficult to buy size as you have to take what you can get; patience is definitely a virtue on some of these new positions. My big reward will be a significant rise in these stocks when the market does turn around. Likewise, I must be patient with the lack of bids in the stocks that I am looking to prune out of my portfolios; many of the stocks that I am looking to sell are stocks that I really don’t want to sell but stocks that I feel will underperform the new stocks that I want to buy. If my thinking is correct I will be able to buy back my old positions, if I choose, with a lot more money thereby giving me a greater position in the end.

This is a very important point in time as many investors have completely overlook

Mick100
12-07-2005, 12:34 AM
Revamped CRB index

Adam Hamilton

http://www.gold-eagle.com/gold_digest_05/hamilton070805.html

,

Mick100
27-07-2005, 11:17 AM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Oil, Copper Rise as Yuan Gain to Boost China Demand (Update5)
July 22 (Bloomberg) -- Crude oil and copper rose on expectations China will boost consumption of raw materials after the country revalued the yuan, making commodities priced in dollars cheaper to import.

``We expect Chinese demand for commodities and especially for oil to increase,'' said Tobias Merath, a strategist with Credit Suisse in Zurich. ``Since commodities are traded in U.S. dollars, a yuan appreciation makes them more affordable for Chinese consumers.''

China Petroleum & Chemical Corp., the largest oil refiner in Asia, and Jiangxi Copper Co., China's biggest producer of the metal, are among companies that will benefit from lower import costs. China is the largest oil consumer after the U.S. and the biggest nickel buyer after Japan.

Cheaper raw materials may accelerate demand already up from last year with the expansion of China's economy, which grew 9.5 percent in the second quarter and helped fuel a four-year surge in commodity prices. The Reuters/Jefferies CRB Index of 19 commodities rose to 24-year high in March. Oil reached a record $62.10 a barrel on July 7, and copper touched a 16-year high last month.

China will value the yuan against a basket of currencies, the central bank said on its Web site yesterday. The new yuan rate strengthens the currency by 2.1 percent to 8.11 per U.S. dollar immediately, the People's Bank of China said. Until now, the yuan had been pegged at about 8.3 per dollar.

Stimulate Demand

``Anything that makes commodities cheaper for China will stimulate demand,'' said Nick Moore, a metals analyst at ABN Amro Holding NV in London. ``The revaluation is a lot smaller than expected. We were hoping for 6 percent.''

Some executives don't expect the change in the exchange rate to spark a significant jump in demand.

``A 2 percent revaluation is tokenism,'' said Daniel DiMicco, chief executive officer of Nucor Corp., the second- largest U.S. steel producer. ``I'm encouraged by the fact that they did something, but I think it was done more to appease folks.''

China's decision also didn't boost commodity prices yesterday. The CRB index fell 0.9 percent, the biggest drop in three weeks, to 300.76, led by declines in grains, copper and energy prices.

Crude oil futures for September delivery rose 27 cents, or 0.5 percent, to $57.40 a barrel at 10:17 a.m. Singapore time in after-hours trading on the New York Mercantile Exchange.

No Big Deal

``China now has more buying power to satisfy its appetite for commodities,'' said Mike Armbruster, co-founder of Altavest Worldwide Trading Inc. in Laguna Hills, California. ``The China story is big news but I'm doubtful it will completely alter the landscape in the crude oil market.''

The oil-import bill for China rose 42 percent to $15.2 billion in the first half, the state news agency Xinhua reported on July 11.

``A yuan revaluation would bring oil prices to record highs,'' said A.F. Alhajji, an energy economist and associate professor of economics at Ohio Northern University. ``While no one knows for sure how much China's oil demand would increase as a result of a yuan revaluation, the current tight oil market indicates that oil producers cannot meet any incremental demand, which would force oil prices even higher.''

Every 1 percent appreciation may increase the 2005 net income of China Petroleum & Chemical, or Sinopec, by 3.5 percent, Fan Cheuk Wan, head of China research at ABN Amro Bank NV in Hong Kong said in a note to clients May 9.

Substantial Savings

A revaluation is ``good news for us because we buy oil in U.S. dollars,'' said Huang Wensheng, a spokesman for Beijing- based Sinopec. About ``21 percent of our oil is from domestic sources and 79 percent is imported. It will mean substantial savings for us.''

Copper futures for September delivery rose 1.45 cents, or 0.9 percent, to $1.5845 a pound in electronic trading on the Comex division of the New

Mick100
03-08-2005, 10:19 PM
From The AUSTRALIAN

Oil prices spike infrastructure
By Shane Wright
August 03, 2005

HIGH oil prices are underpinning another surge in infrastructure investment that could continue for years to come, a new report has found.

The Access Economics-Delta Electricity investment monitor found an 11.1 per cent increase since March in the value of projects on the drawing board or under construction.

Access put the total value of projects being considered at $375 billion, of which $95 billion worth was under construction.

The total value of possible projects rose 20.9 per cent to $124.8 billion, while the value of committed projects jumped 26.5 per cent to $31.4 billion.

The value of all projects is now 15.9 per cent up on where it was a year ago.

Access associate director David Rumbens said state governments had sunk money into major infrastructure projects in recent months.

But it was the energy sector, driven by soaring oil prices, that looks set to keep Australia's recent lift in infrastructure investment moving forward.

"Strong energy demand is firming plans for large LNG projects in Western Australia and the Northern Territory," he said.

"While high oil prices hurt consumers at the bowser, Australia as a net energy exporter gets some benefits through higher profits and investment.

"If prevailing conditions continue, it may well be energy developments that see a fourth wide drive growth into the investment cycle into the future."

Access found the value of proposed infrastructure projects in Western Australia grew 15.1 per cent in the June quarter to more than $103 billion.

There was also a surge in Victoria (up 15.6 per cent to $79 billion), Queensland (up 14 per cent to $68.5 billion) and Tasmania (up eight per cent to $7.5 billion).

Infrastructure investment in both NSW and Victoria is being led by transport projects, while mining-related activities are pushing work in Queensland and WA.

Access said growth in commercial building is easing as growth in the domestic economy slows, partly due to the cool housing market.

Mick100
06-08-2005, 11:23 AM
The baltic Dry Index - Troubled Waters Ahead

http://www.kitco.com/ind/Downs/aug042005.html

Extract:

The BDI provides an assessment of the price to move the world’s major raw materials by sea and insight into the global shipping market. It is an accurate barometer of the volume of global trade. A large demand for shipping means rising rates, and slack demand means lower rates. The BDI doesn’t deal with ships carrying finished goods. It only deals with precursors to production, so the index seems to be a better indicator for economic growth and production and is devoid of speculative content. No one books an ocean freighter on a hunch! When bulk shipments of cement, grain, iron ore, etc. are arranged with a shipping company, there is economic activity planned at the end of the line where the raw materials are delivered.
.

Mick100
06-08-2005, 12:21 PM
Bullish news for those holding US and Canadian natural gas shares

Electricity demand reaches record levels
http://www.msnbc.msn.com/id/8825380/

,

Mick100
19-08-2005, 11:05 PM
Aden sisters on commodities, gold and silver

http://www.gold-eagle.com/editorials_05/aden081805.html

,

Mick100
12-09-2005, 12:06 AM
Time to get into tangibles


http://www.gold-eagle.com/editorials_05/saxena090905.html

,

Mick100
12-09-2005, 11:12 AM
The great resourse bull markets - Doug Casey

http://www.kitcocasey.com/displayArticle.php?id=276

,

yogi-in-oz
12-09-2005, 01:58 PM
:)

Hi folks,

You look lonely in here, Mick ..... :)

Soybeans ... looking for some significant news/moves from
this market on 13 Sept 2005, at about 11:23 am (Chicago time).....

On 12-13 September 05, then we may see prices fall
further to bounce off new lows around 5.60
(exactly 2.00 from the June solstice highs ???).

Could be an interesting week for soybeans.

happy days

yogi

:)

arco
15-09-2005, 07:38 PM
May be of interest.............

http://www.freecharts.com/Commodities.aspx?page=mktcom

Mick100
16-09-2005, 11:56 AM
Handy link

Cheers Arco

,

Mick100
22-09-2005, 01:32 PM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Shanghai Copper Rises as Oil Price Surge Spurs Commodity Buying
Sept. 20 (Bloomberg) -- Copper futures in Shanghai rose for the first day in five as surging oil prices prompted hedge funds to buy commodities and as copper users build inventories before the week-long National Day break.

The Reuters/Jefferies CRB Index of 19 commodities yesterday rose 3.8 percent, the biggest percentage gain since the index debuted in September 1956. Crude oil and other energy prices soared on concern Tropical Storm Rita may disrupt fuel output in the Gulf of Mexico.

``Copper rose as the storm triggered fund buying,'' said Cai Luoyi, head of research at China International Futures (Shanghai) Co.

Copper for December delivery, the most actively traded contract, rose as much as 920 yuan, or 2.7 percent, to 34,510 yuan ($4,265) a metric ton on the Shanghai Futures Exchange. The contract traded at 34,370 yuan at 11:30 a.m. break local time. Shanghai copper futures have fallen 2.2 percent from a closing high of 35,130 yuan on Sept. 5.

Copper for immediate delivery on the Changjiang Nonferrous Metals Spot Market rose 430 yuan, or 1.2 percent, to 36,030 yuan a ton today. The premium for copper from Chile, the world's biggest producer, fell to 380 yuan from yesterday's 600 yuan over the front-month futures contract.

Copper in New York yesterday rose the most in 11 months on speculation that some manufacturers will resume purchases of the metal. The rally accelerated as oil, gasoline and natural-gas prices surged, said Michael Purdy, a trader at ABN Amro Holding NV in New York.

Copper for delivery in December yesterday rose 3.9 percent to $1.6545 a pound on the Comex division of the New York Mercantile Exchange. The contract rose to $1.655 a pound at 12:30 p.m. Shanghai time in after-hours trading.

On the London Metal Exchange, copper for delivery in three months was bid at $3,642 a ton and offered at $3,647 at 12:28 p.m. Shanghai time. It closed 3.2 percent higher at $3,623 yesterday.

-- Editor: White.



To contact the reporter for this story:
Helen Yuan in Shanghai at hyuan@bloomberg.net
Last Updated: September 20, 2005 00:47 EDT

Mick100
22-09-2005, 10:06 PM
China May Invest A$10 Billion in Australian Mines (Update1)
Sept. 22 (Bloomberg) -- Chinese metals companies such as Beijing Shougang Co. are in talks to spend as much as A$10 billion ($8 billion) on Australian mines to make sure China's mills don't run out of raw materials.

The planned acquisitions could increase China's total investment in Australian projects six-fold within three to five years, said Henry Wang, senior investment commissioner for Greater China at government agency Invest Australia.

Commodity prices have risen to all-time highs because global mining companies such as BHP Billiton can't keep up with China's demand for materials to feed mills, building sites and car plants. As competition for minerals increases, steelmakers and traders including Beijing Shougang and Sinosteel Corp. are going to the source to ensure they have enough iron ore and coal.

Overseas investment ``is a necessary and natural step for Chinese metal producers because the country is short of natural resources,'' said Lin Hai, who helps manage the equivalent of $1.8 billion for Guotai Asset Management Co., including shares in Baoshan Iron & Steel Co. ``With these investments they can lower costs and take pre-emptive rights on the raw materials.''

Half of the proposed Chinese investments are in iron ore, 30 percent in coal and the rest in natural gas and other metals, said Wang, who runs four of the agency's 12 overseas offices. Australia, the world's biggest coal and iron ore supplier, had garnered A$1.6 billion of investment from China by the end of 2004, according to Wang.

Steady Supply

Beijing Shougang, the publicly traded unit of China's fourth-biggest steelmaker, will pay A$120 million for a 50 percent stake in Mt. Gibson Iron Ltd.'s A$722 million iron ore project in Western Australia, subject to a feasibility study, Mt. Gibson Finance Director Alan Rule said by phone from Perth.

``We definitely need to invest in overseas iron ore projects so we can secure a steady raw material supply for our plants,'' Liu Anshan, a spokeswoman at Shougang Group's mining resources unit, said in Beijing.

In 2001, Baosteel invested $30 million in the Eastern Ranges iron ore mine in Western Australia, partnering Rio Tinto.

China wants ``to control the supply chain,'' said Wang at a conference organized by London-based Metal Events Ltd. on Sept. 16. ``There's an urgency for them to get into long-term contracts or be involved in directly investing.''

Competition

Australian exports of minerals and energy rose to a record A$67.4 billion in the year ended June 30, boosting the local dollar by 9 percent in a year. Commodities account for 60 percent of the country's export earnings.

Chinese companies are competing for Australia's resources with rivals such as South Korean steelmaker Posco, Japan's Nippon Steel Corp. and Mitsubishi Corp., which already own stakes in Australian mines.

Indian companies are also hunting for assets. Coal India Ltd., which produces 87 percent of the nation's supply, is looking for stakes in Australian mines and plans this year to meet with officials from Queensland state.

Chinese companies are in talks to participate in all eight new iron ore projects being developed in Western Australia, Wang said. Fortescue Metals Group said this month it held talks with investors, including steel trader Sinosteel, which in June signed a joint development with Perth-based MidWest Corp.

``Of the total iron ore that China imports, China has some kind of involvement in the supplier in 25 percent of them,'' Wang said. ``The Chinese industry wants to increase that to 50 percent.''

Uranium Talks

Iron-ore contract prices charged by BHP Billiton, Rio Tinto and Cia. Vale do Rio Doce, which account for more than three quarters of global ore trade, jumped 71.5 percent from April 1.

Chinese companies are also ``very interested in getting involved in the mining of uranium,'' Wang said. These include ``state-owned enterprises involved in nuclear-power generation,'' he said, declining t

Mick100
25-09-2005, 11:20 PM
Houses and Commodities - steve Savill

http://www.gold-eagle.com/editorials_05/milhouse092305.html
,

Mick100
25-09-2005, 11:29 PM
A sweet deal - Sugar

Puru Saxena

http://www.gold-eagle.com/editorials_05/saxena092305.html
,

Mick100
27-09-2005, 01:29 PM
China's Central Bank Raises GDP Forecast
Monday September 26, 5:21 am ET

China's Central Bank Raises GDP Forecast for 2005 to 9.2 Percent


SHANGHAI, China (AP) -- China's economy is expected to expand 9.2 percent this year, up from an initial estimate of 9 percent, the nation's central bank said Monday.
However, growth in China's gross domestic product is expected to slow slightly to 8.7 percent in the first half of 2006 from the same period in 2005, the research bureau of the People's Bank of China said in a report carried by its official newspaper, the Financial News.

The report did not elaborate on the reason for the revision in the GDP growth estimate. But economists have pointed to strong demand for exports and a rebound in spending on construction as key reasons for the continued strong growth.

Meanwhile, China's consumer price index -- the main barometer for inflation -- will come in at 2 percent this year, down from the previously reported 2.7 percent, the central bank said.

The index rose 3.9 percent in 2004 and rose 2.1 percent in the first eight months of this year over the same period of 2004.

"The yuan revaluation has put certain downward pressure on domestic prices," the report said, referring to the July 21 move by the central bank to raise the nation's currency by 2.1 percent against the U.S. dollar and allow it to trade in a restricted float against a basket of currencies.

China's economy grew a blistering 9.5 percent in 2003 and 2004.

The government has sought to slow growth down to more sustainable rates, saying that soaring demand for energy and other resources is straining the country's transport systems and supplies and that surging excess investment in property developments and other construction could lead to financial problems.

Mick100
27-09-2005, 11:46 PM
Natural gas woes bigger story than crude oil
Mella McEwen
Oil Editor
Midland Reporter Telegram
09/25/2005


Having seen his prediction that crude oil prices would reach $65 a barrel become reality, Dr. Michael Economides is making equally bold predictions about natural gas.


Natural gas prices, he said Wednesday while visiting Midland to address the Permian Basin section, Society of Petroleum Engineers, will reach $20 per thousand cubic feet (Mcf) around Christmas.


Having forecast $65 oil, he said, he's now predicting $100 oil "but I'm not impressed with that. Natural gas is the real story."


Economides, professor at the Cullen College of Engineering at the University of Houston and managing partner in a petroleum engineering and strategy consulting firm, lists several reasons for his expectations of high energy prices.


One is the "perfect storm" of Hurricanes Katrina and Rita. Rita's approach has, as of Wednesday afternoon, knocked out 73 percent of the Gulf of Mexico's oil production as personnel were evacuated from offshore rigs and production platforms. On Tuesday, the U.S. Minerals Management Service survey of Gulf of Mexico natural gas wells found that 3.3 percent of gas production has been shut-in as a result of Hurricane Katrina three weeks ago.


There is, he said, 3.5 million cubic feet of Gulf of Mexico natural gas production off-line that likely won't be back on the markets by Christmastime.


"What's going to happen is we're going to have a huge shortfall of natural gas and around Christmas there will be a bad present for the Midwest," he observed.


That comes at a time, Economides said, when the nation is transitioning from crude oil to natural gas use and domestic production is already struggling to meet rising demand.


"Over the next 20 years," he said, "we will have a 25 percent increase in natural gas demand for just electric power generation. Of that, 21 percent will be for new plants and 4 percent to replace coal and nuclear plants."


That means, continued Economides, who has recently appeared on national business news programs discussing energy prices, that over that 20-year period, natural gas demand will rise another 10 trillion cubic feet -- to about 33 Tcf -- and "this means liquefied natural gas will be the only solution."


Never before, he noted, has natural gas reached $12 per Mcf, as it has in the aftermath of Hurricane Katrina. But, he said, even if Katrina and, now Rita, had not stormed through the Gulf of Mexico, the energy markets had problems meeting demand.


He cites other issues impacting energy markets, both domestic and global. Domestically, tight refining capacity is a "disaster," he said, adding that "no doubt" additional refining capacity would have eased supply shortages that sent gasoline prices to $3 per gallon after Katrina damaged Gulf Coast refineries and pipelines that sent supplies to the Midwest and Northeast.


Globally the United States is going to have to increasingly compete with other nations for oil and natural gas supplies. China, Economides pointed out, increased oil demand 20 percent in 2004 and will increase demand 20 percent this year. The producing members of the Organization of Petroleum Exporting Countries, despite promising this week to increase production by 2 million barrels, has no excess production capacity, he said, and tensions between the United States and major producers Iran and Venezuela could jeopardize supplies from those two countries.


Another major producing country, Russia, has regressed to what Economides called the Brezhnev era with the state takeover of Yukos, once Russia's largest oil company, and the jailing of its founder, Mikhail Khodorkovsky. That, he said, puts over 50 percent of Russia's oil production capability in government hands and "that's a serious deficiency."


He chided the Bush administration for not forcefully opposing the Russian government's actions, saying the administration should be blasting Russian President Vladmir Putin.


"The Bus

Mick100
28-09-2005, 04:24 PM
"MOLY" THE NEXT SECTOR TO ROCK!
by Mike Hoy
September 26, 2005


For those of you who haven’t noticed; it appears that the price of Molybdenum (moly) is on the move and the funny thing is, it is moving in the opposite direction of what most of the analysts and newsletter writers have predicted. HOW CAN THAT BE? How can they be wrong about a base metal that has skyrocketed in price by more than 12 X in the last 3 years? Funny thing about this is the fact that it is not really their fault that they have been on the wrong side of the price movement with their predictions.

Moly is one of the most unknown and mis-understood base metals in the world today. This metal is unquestionably the metal of the 21st century. Not only is it the metal of the 21st century but very few individuals, investors, newsletter writers and even companies that produce moly have a clue to the importance that moly will play in shaping the rest of our lives and the lives of generations to come.

The best part about this is the fact that we, as consumers, are going to be the big winners. Not only will the consumer be a huge winner but countries such as the US and China can now look at each other as partners in the development of crucial technology and power plants that will easily solve the world’s energy problems and needs rather than fierce competitors for the worlds dwindling supplies of natural resources.

Think about it for a second! What better way to cool the world’s frayed nerves than to come up with a solution to the world’s energy crisis! Think of the possibility of buying gasoline at $1.50-$2.00/gallon again. Believe it or not there is a solution to the world’s energy crisis and the technology has been around for decades! In fact this technology is now in the process of becoming a reality.

China and South Africa are working together to develop and build power plants that will liquify coal in a process that makes their vast reserves of coal economical and the finished product is burned pollution free. Think of what this means! Both the US and China can tell the oil producing nations, of the world, to go take a “high flying leap off their tallest oil rig.” For the first time in years I have positive feelings about the future and I can see a way for the US to solve many of its pressing problems. Think of automobiles and power plants burning fuel that is virtually pollution free for a lot less than we pay for the same energy today! This technology will not only solve our energy crisis but it will also do wonders in solving the world’s air pollution crisis and the threat of global warming.

I hope you are getting as excited as I am because from my standpoint I have searched for a very long time to find anything to be positive about in the world today. Not only does this give me something to cheer about but the timing cannot be better.

Now you have got to be asking yourself “how does moly fit in to this?” The answer to that is very simple but yet it has been kept a “BIG SECRET!” Very few people know or understand the fact that MOLY is the catalyst to clean the impurities out of the vast quantities of coal and stranded natural gas that exists in the world today. With moly as the catalyst there is very little doubt about the fact that the demand for moly can do anything but increase significantly over the years to come.

Very few newsletter writers, analysts or even producing moly companies understand the fact that the world of the 21st century cannot exist, in the manner that it will, without a much larger supply of moly than is available in the market today..

Without this knowledge there is no way that many of these very intelligent people could come to the conclusion that the price of moly could do anything but fall in price. That would be a logical and practical opinion to form.

For months newsletter writers and analysts have said that moly prices would fall below $15/lb. after peaking above $39/lb. For months end users of moly have waited for the pullback in price. Most of these end users felt that moly had no-where t

Mick100
04-10-2005, 09:50 PM
OUTLOOK FOR STEEL DEMAND

http://www.iht.com/articles/2005/10/03/business/hot.php
,

Mick100
09-10-2005, 12:10 AM
Silver / oil ratio

Adam Hamilton

http://www.gold-eagle.com/gold_digest_05/hamilton100705.html
.

airedale
09-10-2005, 01:47 PM
Hi Mick, interesting post on siver/oil ratio.
Mike Hoy sounds uber-exuberant about molybdenum but its probably worth having a look at it.Leave no stone unturned etc.

arco
09-10-2005, 05:32 PM
38-STEPS TO BECOMING A SUCCESSFUL TRADER

Steps to Successful Commodities Futures Trading
as published in Commodity Futures Trading Club News
and in Traders Organization's Real Success Daytrading Course

We accumulate trading information - buying books, going to seminars and researching.

We begin to trade with our 'new' knowledge.

We consistently 'donate' and then realize we may need more knowledge or information.

We accumulate more information.

We switch the commodities we are currently following.

We go back into the market and trade with our 'updated' knowledge.

We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.

We start to listen to 'outside news' & other traders.

We go back into the market and continue to donate.

We switch commodities again.

We search for more trading information.

We go back into the market and continue to donate.

We get 'overconfident' & market humbles us.

We start to understand that trading success fully is going to take more time and more knowledge then we anticipated.

--------------------------------------------------------------------------------


Many Traders Will Give up at this Point as they Realize Work is Involved



We get serious and start concentrating on learning a 'real' methodology.

We trade our methodology with some success, but realize that something is missing.

We begin to understand the need for having rules to apply our methodology.

We take a sabbatical from trading to develop and research our trading rules.

We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.

We add, subtract and modify rules as we see a need to be more proficient with our rules.

We go back into the market and continue to donate. We go back into the market and continue to donate.

We start to take responsibility for our trading results as we understand that our success is in us, not the trade methodology.

We continue to trade and become more proficient with our methodology and our rules.

As we trade we still have a tendency to violate our rules and our results are erratic.

We know we are close.

We go back and research our rules.

We build the confidence in our rules and go back into the market and trade.

Our trading results are getting better, but we are still hesitating in executing our rules.

We now see the importance of following our rules as we see the results of our trades when we don't follow them.

We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.

We continue to trade and the market teaches us more and more about ourselves.

We master our methodology and trading rules.

We begin to consistently make money. We begin to consistently make money.

We get a little overconfident and the market humbles us.

We continue to learn our lessons.

We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.

We are making more money then we ever dreamed to be possible.

We go on with our lives and accomplish many of the goals we had always dreamed of.

http://www.commodities-futures.com/

arco
12-10-2005, 09:12 AM
Coffee anyone?

Coffee has broken up thru the downtrend line on the weekly and looks positive at the moment for a possible run north.

http://www.khalsaspad.com/files/101105_701.gif

Mick100
19-10-2005, 05:37 PM
POWER SHIFTS!
by Puru Saxena
October 17, 2005


I will start the proceedings by making a bold claim - Asia powered by China, will provide economic leadership over the coming decades.

Let us face it; America’s days as the undisputed global leader are now numbered. Unfortunately for the US, history has never been kind to empires. They rise from the ashes, flourish and eventually decay. The past is dotted with glorious states, which ultimately faced the inevitable – the eventual decline! The 16th century belonged to the Spanish, the 19th century was dominated by the British and the 20th century saw the growth of America. So, who will take charge of the 21st century?

I am of the opinion that China will dominate our planet in the future. You may think I am crazy. But, if someone had told you in 1900 that the United States would replace Britain as the world leader in the 20th century, you would have pronounced him crazy too! So why am I so sure that the dragon will rule?

Remember, the People’s Republic of China is a massive market with 1.3 billion people. When the Chinese leaders unleashed capitalism 20 years ago, they changed our world forever. The Chinese economy has been gradually opening its doors and the effects are being felt today in several sectors. The most profound impact has been felt in the commodities arena. China is in the early stages of its industrialisation and per-capita consumption is still depressed. Yet, China has already replaced the US as the largest consumer nation in the world! China is now the largest consumer of copper, zinc, tin, rubber, raw wool, cotton, coal and major oil seeds. Furthermore, it is already the second largest consumer of oil (despite a ridiculously low per-capita consumption of 1.7 barrels when compared to 25 barrels in the US!), aluminum, nickel and lead.

The point I am making is that China’s hunger for raw materials is going to increase in the future. As more and more jobs are transferred to Asia, the standard of living will rise. Wealthier people consume more things – period. Multiply any small increases in consumption by the 1.3 billion Chinese and you get a gigantic figure! This thought must have businesses dreaming all around the world!

China is now the 7th largest economy in the world and worth US$1.4 trillion dollars. However, adjusted for differences in purchasing power, the Chinese economy is already the 2nd largest and over 60% of the size of the US economy.

Today, China has 46 colour televisions per 100 households, 21 telephone lines per 100 people, 22 mobile phone users per 100 people, 3 computers per 100 people and 0.1 internet hosts per 1,000 people! These figures are miniscule when compared to the “developed” nations of the world. For instance, America has 99.5 colour televisions per 100 households, 62.4 telephone lines per 100 people, 54.6 mobile phone users per 100 people, 66 computers per 100 people and 680 internet hosts per 1,000 people!

What will happen to domestic demand (and commodity prices) when the 371.6 million Chinese households start consuming more? You don’t have to be a rocket-scientist to figure out that the price of raw materials will go through the roof!

Modern China boasts two major cities – Shanghai and Beijing. Over the coming years, I suspect another 15-20 major cities will spring up all over China. Already, there is an exodus from rural areas towards urban centres and these ambitious people will need housing and employment. If America can boast of several major cities (New York, San Francisco, Los Angeles, Washington DC, Houston etc.) then why can’t China build at least the same number? In my view, it is inevitable that in a few years from now, Wuhan, Tianjin and Shenzhen will one day light up the night sky as major American cities do today. I want you to consider how much steel, copper, tin, lead and energy will be used to build these cities.

In addition to this, what about China’s neighbour, the second most populated nation in the world? India. It is home to 1.1 billion people and has 199.4 million households

pago
19-10-2005, 06:09 PM
hi mick,impressive stats,where and how did you get them.i cant disagree with your logic on the growth prospects of china and india but,,,,they need to sell their products to support their growth and if their overseas consumers are in the doldrums,ie the usa,they may not get the cars/television so soon.i did appreciate your stats,cheers pago.

Mick100
19-10-2005, 06:22 PM
quote:Originally posted by pago

hi mick,impressive stats,where and how did you get them.i cant disagree with your logic on the growth prospects of china and india but,,,,they need to sell their products to support their growth and if their overseas consumers are in the doldrums,ie the usa,they may not get the cars/television so soon.i did appreciate your stats,cheers pago.


The artical is authored by Puru Saxena
The stats look genuine to me
India is one of the lowest per capita oil consumers in the world at about 0.7 barrels per yr

I see your point about the US being the number one consumer at present but don't forget, it's not just americans buying chinese made goods. As these asian countries become more wealthy thier own consumption will increase to the point where they are consuming much more than they do ATM. I think this is the point Saxena is trying to make.

,

Mick100
27-10-2005, 10:31 PM
More good news for commodities investors -

Bernanke to be next FED chairman (let the good times roll on)

http://www.gold-eagle.com/editorials_05/balarie102605.html
,

Mick100
09-11-2005, 10:13 PM
THE ENERGY SECTOR REMAINS ATTRACTIVE
by Joseph Dancy, LSGI Advisors, Inc.
Portfolio Manager, LSGI Fund
Adjunct Professor, SMU School of Law
November 8, 2005


The hurricane season of 2005 has been the most prolific ever. Wilma's formation last month, followed by Alpha and Beta, gave us 23 named storms. The previous record - 21 storms - was set in 1933. According to hurricane expert Dr. Jeff Masters “We’re living history this year. . . . This is a once in a lifetime hurricane season.”

Dr. Masters describes the ferocity of the recent storms: “There has never been a hurricane like Wilma before. With an unbelievable round of intensification . . . Wilma smashed the all-time record for lowest pressure in an Atlantic hurricane. . . This is an incredibly compact, amazingly intense hurricane, the likes of which has never been seen. The Hurricane Season of 2005 keeps topping itself with new firsts, and now boasts three of the five most intense hurricanes of all time--Katrina, Rita, and Wilma.” (emphasis supplied)

Since around 20% of our natural gas supplies and 25% of U.S. crude oil production originate from fields in the Gulf of Mexico, the increased storm activity has had a major impact on the U.S. energy sector. The Minerals Management Service reports that 67% of crude oil production and 54% of the natural gas production in the Gulf of Mexico remains shut-in – over sixty days after the first hurricane made landfall! In addition, over 5% of U.S. refinery capacity remains off-line. Numerous natural gas processing plants and pipelines remain shut down or are operating at a reduced rate, as well as onshore oil and natural gas wells.

The Outlook for the Energy Sector

While we expect the energy markets to be volatile, we remain bullish on the energy sector for the following reasons:

The first week of November traditionally marks the start of the heating season for the natural gas markets. At the end of the summer injection season natural gas volumes in storage will exceed 3.14 trillion cubic feet (tcf) – around 100 billion cubic feet below last year’s storage levels. Note that it took natural gas prices of $13 per thousand cubic feet (Mcf) this summer for the companies to acquire the necessary gas to fill the storage facilities versus around $7.75 per Mcf in the year ago period.

In ‘normal’ years 3.14 tcf in storage would be considered satisfactory to meet expected winter heating demands. Around 80% of winter demand is met by production facilities and around 20% of demand is met from natural gas retrieved from storage facilities. With such a high proportion of the nation’s natural gas production remaining off line there is a high probability that larger than normal draws from storage will be required to meet winter demand. If we have a cold winter draws on storage will be much higher than we have seen in recent years. If this thesis proves correct expect natural gas prices to remain elevated, and possibly spike, this winter.

This week natural gas futures traded for $13 per Mcf. Last year at this time natural gas sold for $7.75 per Mcf. The U.S. Department of Energy predicted the average heating bill this winter in the U.S. will increase 47% over last year’s level. The market clearing prices needed to allocate natural gas production remain elevated. Higher prices will result in higher cash flow and earnings for any companies in the natural gas extraction and marketing sectors.

Long term forecasters at Accuweather predict a colder than normal winter in the Northeastern U.S. – which should provide healthy demand for both heating oil and natural gas. AccuWeather found a high historical correlation between active hurricane seasons and cold ensuing winters in the Northeast. Weather patterns existing in the "hyper-hurricane" seasons of 1933, 1969 and 1995 resulted in abnormally cold winters in the Northeast.

Accuweather’s forecast calls for Northeastern U.S. temperatures to be as much as 3.5 degrees colder than normal – significantly below normal in a high population area.

China’s economy grew by 9.

Mick100
12-11-2005, 12:26 PM
Copper prices touch lifetime high
Gold gains 2.5% on week; platinum at 26-year high



SAN FRANCISCO (MarketWatch) -- Copper prices touched a lifetime high Friday above $1.90 a pound on supply concerns, platinum hit a 26-year peak and gold futures marked a five-session climb to close 2.5% higher for the week.







Copper ended the week with a gain of 3.2% and platinum rose 4% from last Friday's close.

December copper climbed to a record $1.9065 a pound Friday on the New York Mercantile Exchange. It closed at $1.9055, up 3.4 cents for the session. A week ago, it closed at $1.846.

On Thursday, Chile's copper commission reduced its production estimate for 2005 from 5.5 million to 5.37 million tons, according to Todd Hultman, president of Dailyfutures.com. It also reduced its estimate of 2006 production from 5.52 to 5.51 million tons.

"There appears to be no stopping copper prices," Hultman said, "despite warnings from China that they may sell some of their state copper reserves."

The industrial metal is "in a monster uptrend that shows no sign of dying anytime soon," said Dale Doelling, chief market technician at Trends In Commodities.

"Deliveries of copper [to] the market [remain] tight as can be seen by the widening of the backwardation," said William Adams, analyst at BaseMetals.com. Backwardation is a condition in which a futures price is lower in the distant-delivery months than in the near-delivery months, according to InvestorWords.com.

"Given the break into new high ground, further short covering is likely to send prices even higher, although expect ongoing producer hedge selling to take advantage of the higher levels," Adams said.

"At some stage this hedging is expected to become the dominant factor, but there's little sign of this happening yet," he added.

Gold tallies five-session win

Gold futures closed higher, pulling the December contract up $1.70 to close at $469.40 an ounce. It closed $11.50 higher for the week after ending last Friday at $457.90.

Bombings in Jordan, a large U.S. trade deficit and negative news on the prices of imported goods are all "positive for gold," said Ned Schmidt, editor of the Value View Gold Report, in his latest newsletter.

Looking ahead, "gold should moderate further in the coming week, though U.S. trading activity will be low due to Thanksgiving," he wrote.

Indeed, "with a strong dollar providing a serious headwind, all signs point to lower [gold] prices in the near term," said Doelling.

For now, taking its cue from the current strength in gold, December silver gained ground, climbing 1.5 cents to $7.72 an ounce.

"Silver will likely feel the effects of any weakness in the gold market, but I doubt that we'll see any major decline," added Doelling.

He also said that "silver's stronger technical picture may cause the market to consolidate here, while gold moves down to test support around the $450 level."

Platinum ends at 26-year high

Rounding out the metals action, January platinum rose $6.40 to close at $971.90 an ounce -- tallying a weekly gain of 4%. December palladium finished at $250.05 an ounce, up $7.10 for the day and up 10.5% from the week-ago close.

Platinum prices traded at a 26-year high and palladium prices were at their highest level since May 2004, according to James Moore, analyst at TheBullionDesk.com in London.

"Investment demand looks set to continue in the coming sessions, with platinum potentially targeting the $1,000 level as the market lacks significant chart resistance levels," he said.

"Industrial and jewelry substitution as well as overflow interest in platinum look set to push palladium higher, with resistance now pegged at $250," he added.

As for U.S. inventories, copper supplies were unchanged at 3,690 short tons as of late Thursday, according to Nymex. Silver stocks were down 385,689 troy ounces at 116.4 million, while gold inventories stood at 6.44 million troy ounces, up 116,012 troy ounces from the previous session.

Indexes gain on day, week

Afte

Mick100
16-11-2005, 09:27 PM
Sugar prices up in storms' wake
Flood damage comes after 2004 hurricanes hit Florida crop
By RUKMINI CALLIMACHI
Associated Press
RESOURCES
Graphic: Louisiana Sugar Production


ERATH, LA. - When the wave of black water descended on this town, the fields of sugar cane were ripe, tall, green shoots bursting with sugar.


"This entire field was a lake," recalled Clay DuPlantis, standing in one of the decimated fields his family has farmed for seven generations.

Thousands of acres of cane ready to be harvested were soaked in salt water as hurricanes Katrina and Rita pounded the Gulf of Mexico 35 miles away. When the seawater receded, much of the cane was damaged and the fields were filled with torn-off porches, picnic tables, splintered furniture and stinking moss.

The loss of the Louisiana sugar cane and disruptions at two sugar refineries in New Orleans sent a shock through the sugar industry, which was already dealing with shortages because of hurricane-damaged crops in Florida last year.

Since the end of August, the price of sugar has gone from 28 cents a pound to over 40 cents, according to the U.S. Department of Agriculture, citing industry publications. That's compounded the pricing difficulties the sugar industry faces — the government keeps prices for sugar considerably higher in the U.S. than on the world market by limiting imports and restricting how much sugar can be sold domestically.

The goal is to protect farmers and processors and ensure a steady supply of sugar.

However, the price difference means that food manufacturers — and consumers — pay more than if there were no restrictions on imports. The world price for refined sugar averaged 14.18 cents a pound, according to the USDA.

The latest increase is being felt mostly by small confectioners, bakers and ice cream makers who don't buy their sugar on the futures market months ahead of time.

"A day without sugar at the candy factory is like a day without air for a human being," said Eric Atkinson, whose grandfather founded Atkinson Candy Co. in Lufkin in 1932. Three times in October, his sugar distributor failed to deliver its promised supply.

Atkinson, whose factory uses up to 40,000 pounds of sugar per day, has tried without luck to bring in two trucks of cheaper Mexican sugar into Texas. "It got bogged down in bureaucracy," he said.

If the shortages and high prices persist, he may have to move his operations offshore, he said. Either that, or raise prices for his sweet treats. In a normal year, the loss in Erath, a town at the heart of Cajun country, and others like it dotting the southern Louisiana coast would not have shaken the market, said USDA senior economist Larry Salathe. The 220,000 tons lost in southern Louisiana represents just 3 percent of the refined sugar grown in the U.S., according to the USDA.

But Salathe describes the destruction of Louisiana's crop as the proverbial nail in the coffin. It followed a bad crop last year in Florida, the nation's No. 1 sugar-cane-growing area. Florida was pummeled by hurricanes in 2004, causing the U.S. sugar cane crop to drop from 4 million tons in 2003 to 3.3 million in 2004.

Congress will be under pressure from food companies to overhaul import and market controls when lawmakers write a new farm bill in 2007. In 2002, the last time Congress rewrote sugar policy, the industry faced the opposite conditions — historically low prices and an oversupply in the U.S.

Meanwhile, in Louisiana, it's still unclear what long-term effects the salt water will have on the fields.

Usually, a field can yield as much as 50 tons of sugar per acre. This year, DuPlantis said he'd be happy to salvage 17 tons per acre from the fields he doesn't have to burn. Only a portion of the damage will be covered by hurricane insurance, he said.

Chuck Williams, manager of Southern Candymakers in New Orleans, said his distributor has increased the price of a 50-pound bag of sugar from $18 to $22 in the last two weeks. But his candied pralines still sell.

"The good thing is when times

Mick100
17-11-2005, 05:45 PM
Copper volatile as China rumours swirl
By Maria Silander
Published: November 16 2005 11:46 | Last updated: November 16 2005 20:57

The copper market remained nervous and volatile on Wednesday as rumours continued to circulate.


Three-month copper prices swung in a $100 range, ending near record highs as speculation on China’s State Reserve Bureau’s plans to buy copper continued.

Three-month contracts touched a high of $4,155 a tonne overnight but eased to $4,139 at the end of pit trading in London after some Asian traders said Chinese authorities were seeking permission to export 200,000 tonnes of metal.

The SRB is at the centre of market speculation that one of its traders has built a potentially costly short position of 150,000-200,000 tonnes of copper on the London Metal Exchange.

Analysts and traders thought the Chinese might be just trying to talk the copper price down to decrease their losses.

“There’s this poker game going on, people trying to bluff each other,” said one trader in London.

“Nobody knows if the Chinese are delivering the metal they said they would or if they have bought the metal to cover a short position.”

If China has bought the metal, that would make the copper market collapse, the trader said. According to some analysts, the interest in copper on the spot market has this week increased compared with three-month contracts. Spot copper declined $32.50 to $4,309.5 a tonne on Wednesday while three-month copper ended $3 up.

Aluminium prices were under pressure because of weaker copper and a 57,350-tonne stock rise in London Metal Exchange. Three-month aluminium prices declined $5 to $2,010 a tonne at the LME. Three-month zinc fell $8 to $1,607 a tonne.

Gold surged to its highest level in four weeks, as fund buying lifted it to $478.60 a troy ounce up $10.70 from its quote in New York on Tuesday and only $1.65 below last month’s near-18-year high of $480.25.

Silver hit an 11-month high in London, rising 27 cents to $8.01 a troy ounce on fund buying and support from the gold rise. Platinum hit another 25-year high, climbing $21 to $988 on a positive industry report.

Crude oil prices rose slightly in reaction to data showing a surprise decline in weekly US crude and gasoline inventories. West Texas Intermediate for December delivery was up 90 cents at $57.88 a barrel by the close of trade in New York. Brent crude for January delivery rose 82 cents to $56.00 a barrel in London.

The Energy Information Administration reported that US crude inventories fell 2.2m barrels last week to 321.4m barrels as imports slumped. Petrol stockpiles fell 900,000 barrels to 200.2m barrels even as demand eased.

Mick100
23-11-2005, 06:34 PM
Markets / Commodities Print article | Email article




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Main page content:
Freezing weather pushes oil and gas prices up
By Maria Silander
Published: November 22 2005 13:34 | Last updated: November 22 2005 20:29



The onset of cold weather turned up the heat on oil and gas prices in London on Tuesday. Oil prices edged towards $59 a barrel and British gas day-ahead delivery surged to its highest levels for at least two years as freezing weather boosted demand.


British gas for day-ahead delivery rallied to 150p a therm, up 30p from Monday’s close. Spot contracts were at 140p, a new eight-month high.

Spot prices have more than doubled in the last week as a decline in output from North Sea gas fields coincided with forecasts that this winter could be the coldest for a decade.

The high gas price has already forced UK power stations and factories to cut production this week to reduce their demand for gas, according to supplier Total. The French energy group said on Tuesday that gas demand was running at about 80 per cent of the level it would expect at these temperatures.

Brent crude oil for January delivery climbed $1.07 to $56.41 a barrel by the end of trade in London, while West Texas Intermediate for January delivery rose $1.14 to $58.84 a barrel by the close of the New York Mercantile Exchange session.

Gold soared in Asian trade to $495.35 a troy ounce on speculative buying, its highest price since December 1987, but eased later to end at $490.90/$491.60 a troy ounce, still up $2.40 from its Monday’s late quote in New York.

Investors are expecting bullion to hit the $500 a troy ounce price soon.

But analysts think that prices could soften this week on profit-taking ahead of a long weekend in the US. Gold has gained nearly 9 per cent since the start of the month in spite of the strong dollar and receding inflation fears.

Silver tracked gold’s gains and peaked at $8.20 a troy ounce, the highest price since April 2004.

Copper fell for the first trading session in nine in London on speculation that China had rescheduled deliveries of as much as 200,000 tonnes, putting off purchases of the metal that would cover its commitment.

There was a further rise in LME copper inventories. Barclays Capital said that the recent flow of copper into Asian warehouses was believed to be from China’s State Reserve Bureau.

Three-month copper contract was at $4,137.5 a tonne on the London Metal Exchange at the end of open outcry trading, down $77.50 from the previous close.

Three-month aluminium fell $31 from its 10-year peak hit on Monday to $2,038 a tonne in late London trade. Zinc peaked at a new eight-year high of $1,659.5 a tonne, up $10.50 from the previous close and only $16 away from setting a new 15-year record.

Mick100
27-11-2005, 04:56 PM
China's Copper Crisis Tells a Bigger Story: William Pesek Jr.
Nov. 25 (Bloomberg) -- If you want a reality check on China's economy, look no further than the copper market.

It's a story that reads more like a spy novel than financial news: A few weeks back, markets buzzed with rumors as Liu Qibing, a well-known metals trader for China's government, went missing. It happened amid talk someone had taken a huge short position -- selling copper futures in a bet prices would fall -- and was losing big as the market went the other way. The government at first denied Liu even worked for it.

All this had trading pits buzzing with questions. Was China facing massive losses? Might it default on trading commitments? Was Liu under house arrest in Beijing? Could China be forced for the first time to disclose its copper holdings? Would it dump copper to drive down prices and cut its losses? Whither metals prices?

Yet these questions, tantalizing as they are, miss the real story -- what the copper mess says about China's economy.

China's economy is the world's sexiest, as evidenced by the gold-rush mentality driving investors, executives and pundits the world over to get a piece of the action. Less chronicled is the growing tension between China's move toward market economics and the socialism it's struggling to leave behind.

Chinese Fashion

The government responded to Liu's wrong-way trade in true Chinese fashion, with opacity. First, it denied being caught in a short position. Then it turned around and tried to talk down the copper market, as if traders wouldn't see through such efforts.

What's at stake here is China's credibility as a financial trading partner, and that's a huge problem. Liu, after all, traded for the State Reserve Bureau, the agency that stockpiles commodities to feed China's industrialization. Regardless of how this affair turns out, China needs to continue amassing the gamut of commodities to fuel its economy. That will be harder without the trust of suppliers and markets.

Investors, too. One barometer of China's challenges is its stock market. While stock indexes don't always correlate with gross domestic product, how could the benchmark Shanghai Composite Index be down more than 12 percent this year amid 9 percent growth?

Economic Implications

Inadequate corporate transparency and governance get much of the blame. One also has to look at China's rickety financial system, which is weighed down by hundreds of billions of dollars of bad loans.

The bureau may become the second Chinese state-owned trader to fall into financial woes in a year. In November 2004, China Aviation Oil (Singapore) Corp. sought protection from creditors after it ran up $555 million of debt from trading oil derivatives. The company bet prices would fall; instead, they rose to a record.

The copper controversy is an even more jarring reminder that the standard of Chinese corporate and financial dealing needs to be upgraded, and fast. It's also a microcosm of how the role of the state stands in the way of China's economic maturity.

Big questions remain about the lines of accountability in Beijing and the relationships between different government agencies. Simply put, the role of the Chinese state remains undefined.

That's why Chinese officials shouldn't have been surprised that markets were skeptical of claims it has 1.3 million tons of stockpiled copper. Ren Yunhe, analyst at Shanghai Shenyin Wanguo Research and Consulting Co., summed it up well: ``The people who believe that are rather few. It's a rather large amount.''

A Matter of Trust

Even if China has a rogue trader akin to Nick Leeson -- the Singapore-based trader who caused the collapse of Barings Plc in 1995 -- on its hands, as it suggests, it still needs to honor its commitments.

Japanese trading house Sumitomo Corp. paid up when its copper trader Yasuo Hamanaka ran up a $2.6 billion loss in the copper market. Should China fail to make good on Liu's trades, it would in some ways be akin to defaulting on debt. Some

winner69
27-11-2005, 06:31 PM
See that man from Newmont on Business Sunday today saying gold >US$1000 in the future

http://businesssunday.ninemsn.com.au/article.aspx?id=74203

Mick100
02-12-2005, 10:56 AM
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Main page content:
Zinc and aluminium lead metals higher
By Kevin Morrison
Published: December 1 2005 11:55 | Last updated: December 1 2005 20:39


Base metal prices extended their record breaking run on Thursdasy, while silver and raw sugar prices reached new long-term highs.






Investors continued to pour more funds into commodity markets even though prices have moved beyond the most optimistic of predictions made at the start of this year.

Copper was again the focus in base metals markets with the benchmark three month price rising by more than $130 to a new record of $4,370 a tonne on the London Metal Exchange. More speculators betted that China’s State Reserve Bureau was holding a large short position with an obligation to physically deliver metal this month.

Traders said there was fresh investment fund buying, and dealers who were short were covering their positions. This suggested that investors or consumers had already sold copper at lower prices and were buying the metal to cover their obligations.

The latest move up in copper prices came ahead of a critical few weeks when the market should learn whether the SRB really has a obligation to deliver significant amounts of copper into LME warehouses.

The three month LME aluminium price struck a fresh near 17 year high when it breached the $2,200 a tonne level for the first time since January 1989 on its way to an intra-day peak of $2,208, up $69 on the day.

Aluminium prices were boosted by reports that China may be reducing excess production of aluminium, which in turn may reduce Chinese exports of the metal and tighten the global supply and demand balance. In addition, Rio Tinto has started to cut output at its New Zealand aluminium smelter due to higher power prices.

China has applied similar curbs in the steel and copper sectors to try and limit speculative investment that Beijing believes puts pressure on the country’s environment, drives up the cost of natural resource imports and potentially leads to bad debt.

The three-month LME zinc price hit a new 15-year high when it touched an intra-day peak of $1,765 a tonne, up more than $200 from the previous close.

Lead prices also hit a record of $1,070 a tonne.

Gold moved back above $500 a troy ounce, hitting a high of $502.20, up $8 on the day. Silver hit a new 18 year high of $8.44 a troy ounce.

Oil prices, which had been relatively flat in late trading, picked up near the close with January Brent up $1.10 at $56.15 at the close of London trade. Nymex West Texas Intermediate for January delivery settled at $58.47, up $1.15, a barrel in New York trade.

Raw sugar futures touched a new nine year high of 12.96 cents a pound on the New York Board of Trade. Sugar last traded above 13 cents in July 1996.

Mick100
06-12-2005, 10:15 AM
http://news.ft.com/cms/s/90efae88-6584-11da-8f40-0000779e2340.html

US crude price back over $60
By Kevin Morrison
Published: December 5 2005 12:05 | Last updated: December 5 2005 20:32



US crude futures moved back above $60 a barrel on Monday for the first time in four weeks on expectations of colder weather in the northeast of the US, which is the biggest consuming region of heating oil in the world.


With New Yorkers braced for snow in the coming days, oil traders there were in a mood to buy.

January Nymex West Texas Intermediate rose to an intra-day peak of $60.26 a barrel, before settling at $59.91, a rise of 59 cents, at the close of trade in New York.

IPE Brent for January delivery added 68 cents to $57.73 a barrel in late afternoon London trade.

US heating oil futures also rose to their highest level in a month with the January Nymex oil futures up 3 cents to $1.8025 a gallon. US gas futures were also higher in anticipation of the colder weather. January Nymex Henry Hub gas futures were up 40 cents to $14.30 per British thermal unit, and within sight of the record high of $14.75 reached two months ago.

Benchmark gas futures have risen $3.50, or almost a third, in the past week as colder weather swept across the US.

Ministers from the Organisation of the Petroleum Exporting Countries have indicated that they are likely to keep production quotas unchanged at their ministerial meeting in Kuwait next week.

Gold rose to a new 23-year high of $508.25 a troy ounce before easing to $506.70/507.50, up from its late quote of $503.00/503.80 in New York on Friday.

Gold hit $509.20 an ounce in February 1983. Anything above that level will bring the metal to its highest since January 1980, when it hit a record $850 an ounce. Gold prices in euro terms reached a record high of €434.51 a troy ounce.

Goldman Sachs, the investment bank, on Monday placed gold as one of its top 10 recommendations in the currency market for 2006.

“The longer-term trend of rising futures volume and open interest reflect this price surge.

“We would look for further acceleration above the $514 area for an initial target at a retracement level around 565, then longer-term towards the $640 level,” it said.

Other precious metals were higher. Silver reached a fresh 18-year high of $8.64 a troy ounce and platinum touched a new 26-year high of $1,006 a troy ounce.

Aluminium struck a new 16-year high of $2,225 a tonne on the London Metal Exchange.

The three-month zinc price hit a 16 year high of $1,805 a tonne as it moved through the $1,800 level for the first time since March 1989.

The three-month copper price was $13 higher at $4,397 a tonne.

Mick100
06-12-2005, 06:55 PM
Anumber of reasons to remain bullish on oil and natural gas - by Joe Dancy

http://www.financialsense.com/fsu/editorials/dancy/2005/1205.html
.

bermuda
07-12-2005, 08:55 AM
Thanks Mick100 and others for this thread.First time I have read it.
I have just returned from China and concur with all your comments.Jiangmen(popn 3m)was literally growing in front of your eyes.New motorways,6 star hotels etc etc.

If China can make it the price will go down.If they cant the price will go up.The stories posted about the bad debts and copper markets will obviously hit them at some stage but this juggernaut will keep on growing at plus 8 % all the same.Their pollution is horrific.On one par five we could scarcely see the green.

Last year there were some big noises that the Chinese would force the price of iron ore down through intense negotiations.This is not happening.Even coking coal is holding onto last years gains.

They are putting 10000 new cars on the road each day.In 1980 they had 20000 cars in total!!!...(but plenty of trucks )

This commodity boom is only just starting.

Mick100
07-12-2005, 03:13 PM
Thanks bermuda

Good to hear about your first hand experience and thoughts

,

Mick100
08-12-2005, 10:25 AM
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Main page content:
Steel costs could drop next year
By Kevin Morrison
Published: December 5 2005 19:57 | Last updated: December 5 2005 19:57

The cost of raw materials for steelmaking could fall next year with a likely rise in iron ore prices being offset by a fall in coking coal prices from their record highs.







Talks between miners and Japanese steelmakers begin in the next month to settle coking coal and iron ore prices for the 2006/07 year starting in April. However, the final outcome on prices will be determined by China, the world’s largest steel producer.

China, the world’s top importer of iron ore, is expected to import 264m tonnes of the raw material in 2005, the Ministry of Commerce said yesterday. It forecast imports would rise by about 35m tonnes in 2006, less than the estimated 56m tonne rise this year.

A slump in domestic steel prices might discourage steel mills from importing more iron ore because many mills are operating on negative margins.

Patrick Cleary, research manager steelmaking costs and raw materials at CRU, a consultancy in London, said that Chinese steel prices for a tonne of hot roiled coil were about $400, compared with $600 for an equivalent amount of steel in the US.

“There is an imbalance in the Chinese market, which cannot be sustained and there is a fear that more Chinese steel will exported and bring down international steel prices,” said Mr Cleary.

Chinese production is estimated at about 330m tonnes of steel this year, up nearly 60m tonnes on last year and about triple the volume of 1997. This rise has required ever increasing imports of iron ore and coking coal, although the Chinese are almost fully self-sufficient in coking coal.

Concern about Chinese excess steel production has made predicting final prices for iron ore and coking coal next year difficult.

Jim Lennon, metals analyst at Macquarie Bank, said benchmark coking coal prices were expected to fall from their current level of $125 a tonne.

“There is a general consensus that prices should stay above $100/t,” Mr Lennon said. He predicted all coking coal types would fall to between $110-115/t.

Iron ore prices in contrast are expected to rise in the forthcoming round of negotiations. At present, iron ore spot prices are $5 above the current contract price of $70 a tonne.

“With spot prices above contract prices, it is fair to assume that the iron ore contract price will rise, providing the fundamentals do not change too drastically over the next few months,” said Mr Cleary.

Mick100
09-12-2005, 09:22 AM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Oil, Heating Oil, Natural Gas Rise as Cold Front Boosts Demand
Dec. 8 (Bloomberg) -- Crude oil, heating oil and natural gas rose as cold weather in the northern U.S. bolsters heating- fuel demand and refiners try to increase production.

Temperatures in New York and Boston will fall to 25 degrees Fahrenheit (minus 4 Celsius) on Dec. 10, forecaster Meteorlogix LLC said. U.S. refineries operated at 90.6 percent of capacity last week, down from 94 percent a year earlier, according to an Energy Department report. Almost 30 percent of the country's capacity was shut in September after hurricanes made landfall.

``The bone-chilling cold should reduce distillate stocks,'' said Jim Steel, director of commodity research at Man Financial Inc. in New York. Refinery output is ``still down from last year even though they have done quite a job getting them back up and running. These factors are raising concern.''

Crude oil for January delivery rose 54 cents, or 0.9 percent, to $59.75 a barrel at 12:13 p.m. on the New York Mercantile Exchange. Prices are down 16 percent since touching a record $70.85 a barrel on Aug. 30, the day after Hurricane Katrina struck Louisiana and Mississippi. Oil is up 42 percent from a year ago.

Heating oil for January delivery jumped 2.34 cents, or 1.4 percent, to $1.76 a gallon in New York. Heating oil reached a record $2.21 on Sept. 1. Futures have gained 40 percent in the past year.

`Snow's Coming Tomorrow'

``Snow's coming tomorrow and it now looks like the cold weather will stay around longer than we expected,'' said Michael Palmerino, a forecaster at Lexington, Massachusetts-based Meteorlogix LLC.

Temperatures in the Northeast should be 2 to 6 degrees below normal through next week, Palmerino said. The normal low in New York at this time of year is 32 degrees Fahrenheit (0 Celsius) and in Boston the low is usually 28 degrees (minus 2 Celsius), he said.

Home-heating demand in the Northeast, where 80 percent of the nation's heating oil is used, will be 17 percent above normal through Dec. 14, Weather Derivatives, a forecaster in Belton, Missouri, said today. Yesterday, heating demand was forecast to be 12 percent above normal in the region.

``More than 25 percent of production is still out in the Gulf and it looks like we are in for consistent cold,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA in New York. ``By the end of the heating season we could be in for some problems.''

U.S. oil production in the Gulf of Mexico yesterday was down 476,035 barrels a day, or 32 percent of the region's total, because of Hurricanes Katrina and Rita, according to the Minerals Management Service. About 2.48 billion cubic feet of natural gas a day is shut, or 25 percent of the Gulf total.

Natural Gas

The rise in prices accelerated after the Energy Department reported that U.S. natural gas inventories declined. Natural-gas and oil prices often move in tandem because as many as 10 percent of U.S. factories and power plants can switch between burning oil and gas. Natural gas is used to heat 55 percent of U.S. homes.

Natural gas inventories fell 59 billion cubic feet to 3.166 trillion last week amid mild weather. Analysts had expected supplies to fall by 65 billion cubic feet, the median of 21 estimates in a Bloomberg survey.

Natural gas for January delivery surged 68 cents, or 5 percent, to $14.38 per million British thermal units in New York. Futures touched $14.55, the highest since Oct. 5, when they reached an all-time high of $14.75. Prices have more than doubled in the past year.

Crude-Oil Supplies

U.S. crude-oil supplies rose 2.7 million barrels to 320.3 million in the week ended Dec. 2, the department said in a report yesterday. The report also showed that heating oil and gasoline supplies increased.

The Louisiana Offshore Oil Port, the biggest U.S. oil import terminal, stopped unloading one sweet crude-oil grade because there is no available stor

Mick100
11-12-2005, 11:41 PM
The BTU Gap
by Elliott H. Gue
Editor, The Energy Letter
December 9, 2005


With natural gas prices hovering at record highs and oil back above $60 a barrel, the media isn't giving coal the time of day. But when it comes to electrical power, coal remains king. In fact, coal is set to become an even more important part of the US electricity grid over the next 20 years.

Prices for coal have been on the rise of late, particularly for low sulphur coal from the Powder River Basin (PRB) in the western United States. But coal-fired power remains far cheaper than gas-fired power. This would remain the case even if gas prices were to fall back under $5 per million BTUs, less than one-third the current quote. Even better, the US has some of the world's most abundant reserves of high-quality low-sulphur coal.

At least when it comes to coal, the US is energy independent.

Several of the big US coal companies gave presentations at a Friedman Billings Ramsey Conference last week; their comments are worthy of note. The CEO of Arch Coal, Steven Leer, spoke about demand for coal over the next few years. He mentioned that the utilization of coal plants has been rising rapidly over the past couple of years’. In other words, coal plants around the country are running more often and standing idle less than they used to.

This is certainly not news. But he went on to say that the traditional seasonal lull periods are disappearing rapidly. Traditionally, demand for coal-fired power has been highest in the summer and mid-winter for cooling and heating demand respectively. The autumn and spring represented lulls in demand. But, he is seeing these valleys in demand disappear—demand for electricity is more constant all year long.

As demand for electricity in the US rises even during lull periods, the utes relied first on the nuclear plants to pump out the additional capacity. But with nuclear running at near-full capacity, coal plants are filling the void.

Additionally, interest in building new coal plants is building. A few years ago, none of the utes wanted to build new coal plants; all the new construction plans were for plants running on natural gas. But with rising gas prices, coal is definitely back on the table—Arch estimates that new plants being planned for the next decade or so could represent upwards of 300 million short tons of additional annual coal demand. This is considerable when you consider that US consumption is currently running at about 1.1 billion short tons annually.

Even more interesting is that Leer echoed the concerns about current utility coal inventories that Peabody Coal made in its conference call back in late October. He stated that many of their customers (utilities) are currently running on inventories of just 10 to 20 days’ worth of coal. This suggests that despite the warm autumn in the Northeast, there are plenty of utes running on uncomfortably low inventories. Most of these utes have stated that they'd like to push their inventories back to the 35- to 40-day range. Short-term demand for restocking those inventories will be high.

Most of the demand will fall on low sulphur coal. There is a market for trading sulphur dioxide allowances--utilities can buy these credits to cover plants that would otherwise fail to meet new environmental regulations. But there's a problem right now: The cost of those sulphur credits is exploding to around $1,200 to $1,400 per credit.

Because it will be some years before the utilities can install cost-effective scrubbers to remove sulphur, many are choosing instead to burn low sulphur coal. By doing this, they're able to avoid paying up big time for those sulphur credits. Much of this low sulphur coal is coming from the Powder River Basin (PRB) in the Western US. The coal miners with low sulphur reserves are benefiting from these high sulphur credit prices--they're able to sell their coal at higher prices to reflect the cost of sulphur allowances.

Take, for example, a standard Western PRB coal containing 0.8 pounds of sulphur per million BTUs. Mo

trendy
12-12-2005, 02:28 AM
Fascinating articles in this thread. You have to wonder what impact China's increasing energy use will have on the climate. Global warming fast tracked?

I agree that coal to liquid and gas to liquid processes will become economic, as are the Canadian tar sands now.

airedale
12-12-2005, 08:41 AM
Hi Mick, interseting article about coal liquefaction etc. As a historical footnote : when Doctor Diesel first started developing the diesel engine in Germany, he started by using powdered coal as the fuel which was blast-injected with compressed air in to the cylinder.

Mick100
13-12-2005, 04:38 PM
The Uranium Story

Sol Palha

http://www.financialsense.com/fsu/editorials/ti/2005/1211.html
,

Mick100
27-12-2005, 11:45 PM
Japan to End Release of Oil Reserves
Tuesday December 27, 6:16 am ET
Japan to End Release of Strategic Oil Reserves on Jan. 4, Report Says


TOKYO (AP) -- Japan will end its release of oil reserves to the United States next week, a news report quoted the economy minister as saying Tuesday.
Japan has been shipping oil from its reserves under a plan brokered by the International Energy Agency to temper rising prices after Hurricane Katrina struck U.S. oil refineries.



"The impact of hurricane damage on the global oil market has been mitigated," Japan's Kyodo News quoted the Economy, Trade and Industry Minister Toshihiro Nikai as telling reporters. "Therefore, we find it appropriate to terminate Japan's oil release on Jan. 4."

The Paris-based IEA announced in September that its 26 members, including Japan, would draw on 2 million barrels a day of oil to help offset the loss of output and refining capacity in the United States caused by Katrina and restore confidence in the market.

Under the release plan, Japan has kept an emergency stockpile equivalent to 67 days of imports over the coming 30-day period. Japan normally keeps a 70-day minimum. The three-day difference is equal to about 10 million barrels.

This is the third time Japan has tapped emergency reserves, after an oil crisis in 1979 and the Gulf War in 1991.

The price of crude is 19 percent below its all-time high of $70.85 after Hurricane Katrina made landfall on Aug. 30.

The price for light, sweet crude for February delivery slipped 82 cents to $57.60 a barrel on the New York Mercantile Exchange in Asian electronic trading midmorning Tuesday in Singapore.

Mick100
27-12-2005, 11:48 PM
Kuwait's biggest field starts to run out of oil


By Peter J. Cooper
KUWAIT: It was an incredible revelation last week that the second largest oil field in the world is exhausted and past its peak output. Yet that is what the Kuwait Oil Company revealed about its Burgan field. The peak output of the Burgan oil field will now be around 1.7 million barrels per day, and not the two million barrels per day forecast for the rest of the field's 30 to 40 years of life, Chairman Farouk Al-Zanki told Bloomberg. He said that engineers had tried to maintain 1.9 million barrels per day but that 1.7 million is the optimum rate. Kuwait will now spend some $3 million a year for the next year to boost output and exports from other fields.

However, it is surely a landmark moment when the world's second largest oil field begins to run dry. For Burgan has been pumping oil for almost 60 years and accounts for more than half of Kuwait's proven oil reserves. This is also not what forecasters are currently assuming.
Last week the International Energy Agency's report said output from the Greater Burgan area will be 1.64 million barrels a day in 2020 and 1.53 million barrels per day in 2030. Is this now a realistic scenario?
The news about the Burgan oil field also lends credence to the controversial opinions of investment banker and geologist Matthew Simmons. His book 'Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy' claims that ageing Saudi oil fields also face serious production falls.
The implications for the global economy are indeed serious. If the world oil supply begins to run dry then the upward pressure on oil prices will be inexorable. For the oil producers this will come as a compensation for declining output, and cushion them against an economic collapse.
However, the oil consumers then face a major energy crisis. Industrialized economies are still far too dependent on oil. And the pricing mechanism of declining oil reserves will press them into further diversification of energy supplies, particularly nuclear, wind and solar power.
All this was foreshadowed in the energy crisis of the late 1970s when a serious inflection in oil supply by the year 2000 was clearly forecast. How ironic that those earlier forecasts now look correct, while more modern and recent forecasts begin to look over optimistic and out-of-date with geological reality.
Nobody can change the geology, and forces of nature that laid down reserves of oil and gas over millions and millions of years. Could it be that we have been blinded by technological advances into thinking that there is some way to beat nature?
The natural world has an uncanny ability to hit back at the arrogance of man, and perhaps a reassessment of reality at this point is called for, rather than a reliance on oil statistics that may owe more to political manoeuvring than geological facts. - AME Info FZ LLC.

Mick100
28-12-2005, 09:27 AM
Outlook for Palladium

Puru Saxena

http://www.gold-eagle.com/editorials_05/saxena121505.html
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Mick100
01-01-2006, 11:49 AM
THE POTENTIAL EMERGING ENERGY CRUNCH, PART 1
by Sol Palha
Tactical Investor
December 29, 2005


Before we work on artificial intelligence why don't we do something about natural stupidity?
Steve Polyak

According to Cambridge Energy Research Associates high energy prices are here to stay until 2008; we think if nothing is done to address the root cause of the problem that high-energy prices could plague Americans for at least another 9 years if not longer. Let’s look at some alternative energy sources:

Wind Power= still not economical and needs huge subsidies.

Coal= While cleaner technologies are being developed to process coal they are still not clean enough; it’s also very labour intensive.

Oil and Gas= these are non-renewable sources and no major discovery has been made for a long time.

Fuel Cells= while very promising it will still be years before anything truly promising has a chance to emerge from this field.

Hydroelectric power= the potential for more power from this source is limited as there are huge environmental concerns of creating new dams. In addition during times of drought power generation can drop to precipitous levels.

This leaves us unfortunately with only one option and that is nuclear energy; the problem is that everyone is now recognizing this at the same time. Nuclear reactors are powered only by uranium and there is only a finite amount of uranium available; to put it mildly at current production there is not going to be enough uranium to power all the new plants that are going to come online in the next few years. In fact we could hit a brick wall as early as 2007.

Russia understands this problem and has already cut back on the amount of Uranium it exports. Japan for their part has decided to stockpile up to five years worth of Uranium supplies and China's known uranium reserves stand at 77,000 tons. China has enough Uranium to power existing reactors for approximately 46 years however they are building so many new reactors that they will need substantially larger amount of uranium soon. It is interesting to note that they always seem to plan for the future and this can be seen by the amount of uranium they have put aside to power their current nuclear plants. If India, Russia and other nuclear nations decide to adapt the same strategy things could really get ugly as several dozen new plants are set to come online over the course of the next decade ;for all we know they might have already started to hoard supplies. What happens when every country in the world that has nuclear energy decides its time to hoard five years or more worth of uranium? In 2005 alone it is estimated that demand will outstrip supply by over 99 million pounds (the figures change from source to source, however the key thing to remember is that we are already experiencing a shortage without the additional 30-45 new plants that are set to be built all over the world in the next 10 years).

Shortages of uranium could get so bad that it could precipitate a war between rivaling nations and then prices could hit unheard of levels. We are entering a new paradigm and the only real solution to avoid unimaginable prices in uranium and possible wars is for someone to come up with a new clean and cheap energy source or for nations to spend billions of dollars in exploration and for the development of new mines. Even if they start today there is still going to be about a lag period of over two years; currently no nation has embarked on such a program yet.

Conclusion

Make sure you have some exposure to the Uranium sector and make sure you are holding the right stocks. It’s not just fundamentals that count; one has to make sure the psychological and technical outlooks are fine also. In fact the technical and psychological picture of a stock is in many cases far more important than the fundamental outlook. The reason is very simple; anyone can read and digest fundamental data and usually the conclusion is always the same. The same does not hold true when it comes to psychological and technical analysi

Mick100
01-01-2006, 11:53 AM
Commodity Profits 2006

http://www.financialsense.com/editorials/kleinman/2005/1227.html
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Mick100
04-01-2006, 09:30 PM
THE POTENTIAL EMERGING ENERGY CRUNCH PART II
by Sol Palha
Tactical Investor
January 3, 2006

The nuclear solution.

You can swim all day in the Sea of Knowledge and still come out completely dry.
Most people do. Norman Juster

Over 50% of the world’s supply of Uranium is located in just 3 countries, Australia 30%, Canada 14% and Kazakhstan 17%. Even though Australia has the world’s largest reserves Canada produces the worlds most uranium accounting for 18% of total output.

Over the next 15 years China plans on building 40 additional nuclear plants (these numbers keep changing the thing to keep in mind is that they are going to keep building). China's known uranium reserves stand at 77,000 tons; currently it consumes 1,650 tons a year. In 2020 this could increase to 8250 tons a year. Further more China has signed strategic deals with Kazakhstan and Canada. It is just a matter of time before it does so with Australia; currently Australia supplies China with significant quantities of uranium. Why are we spending time focusing on what China is doing? We have always stated that one must view the Chinese as advanced chess players; they plan for events decades in advance. Patience and discipline seem to be one of their key strengths and assets. Presently China has enough uranium to power their existing reactors for 46 years; think about that for a second. How many countries have managed to build up such huge reserves so fast; this action definitely indicates that these chaps like to plan for things way in advance. We are positive that they are going to make sure that they have enough uranium to feed the new plants they are building for at least 18 years without any interruption. Hence the bidding war will be left to the other nations. China must be building huge reserves of uranium for a reason; they probably foresee massive price swings in the future.

Consider the following facts:

Uranium prices have almost tripped since the start of 2004.

It is projected that world’s energy demand will increase by an additional 65% in approx 15 years. At this point in time the only solution that appears to have a chance of dealing with this increase is nuclear power plants; the only material able to power these plants is uranium.

One pound of Uranium produces roughly the same energy as 37 barrels of oil or 8.9 tons of coal; the choice is all but obvious.

Technically speaking there is more than enough uranium out there to power all the stations that are going to be built. (Look at the chart towards the end of this article). The problem is that this uranium is in the ground and needs to be mined and at the moment there are not enough mines to produce all the uranium we need. Furthermore not enough money and resources are being dedicated to exploration and the opening up of new mines; another thing to remember is that it can take up to 2 years before a closed mine or a new mine becomes fully operational. Hence demand cannot be rapidly quenched even with the opening of 100’s of new mines. It’s for this reason we think that the long term out look for uranium is rather bright.

Conclusion

The race to build new nuclear plants to supply developing nations future electric needs is about to create a very explosive situation. It’s no longer a matter of if but when this situation will go out of control; we do not have enough uranium above the ground to power current nuclear power plants. At present approx 50% of the demand is coming from reserve supplies (mostly the decommissioning of old nuclear war heads); imagine what will happen when all those new nuclear power plants come online. The tragedy here is that these plants can only operate on uranium and nothing else and so at some point in time these plants will have to do whatever it takes to get uranium or shut down. It’s for this reason we have been taking position in certain stocks that we feel will benefit tremendously from this potentially huge disaster. One such stock already doubled in less than 3 months.

On a separate note there is plenty of Uranium in the

Mick100
05-01-2006, 09:51 AM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Copper Rises to Record in London as Chilean Miners Plan Strike
Jan. 4 (Bloomberg) -- Copper advanced to a record in London as workers planned to strike at Chile's Codelco, the world's largest copper producer, threatening to reduce supplies amid forecasts of a production shortfall for 2006.

A group of 28,000 contract workers are asking for a bonus of 50,000 pesos ($963) from the Santiago-based state company after copper prices rose 40 percent in 2005. President Ricardo Lagos said yesterday the government won't pay the bonus.

The strike ``is just another reason to buy more copper,'' said Andrew Silver, a trader in London at Natexis Metals, one of the 11 companies that trade on the floor of the London Metal Exchange, in a telephone interview. ``This is already a fantastic commodity market.''

Copper for delivery in three months on the London Metal Exchange traded as high as $4,550 a metric ton, beating by $32 the previous record set on Dec. 28. The metal gained $105, or 2.4 percent, to $4,545 a ton as of 10:01 a.m. London time.

The contract workers expect to walk off the job at all of Codelco's four divisions, union leader Miguel Santana said yesterday. The company, which owns about a fifth of the world's copper reserves, produced last year about 1.7 million tons, according to Codelco estimates made in October.

Analysts already forecast demand will exceed production this year. The deficit will be 200,000 tons, Credit Suisse First Boston said in a November report.

Strikes helped curb global production in 2005. Output lagged demand by 140,000 tons last year, Goldman Sachs Group Inc. said in a Dec. 15 report.

Speculative Investors

Copper users may fill the shortfall with inventory. Stockpiles tracked by the London Metal Exchange rose 4.3 percent to 96,175 tons, the exchange said today in a daily report. Inventory monitored by the LME and commodity exchanges in New York and Shanghai is 161,530 tons.

Pension funds and speculative investors such as hedge funds are buying more metals and other commodities after the asset class outperformed other types of investments in 2005. Copper, aluminum and other base metals climbed yesterday as investment funds put more money into metals, said Gordon Buchanan, a trader in London at Stratton Metal Resources.

``There are quite a few pension funds in the U.S. that have been given the green light,'' Buchanan said yesterday in a telephone interview.

Aluminum prices rose to a 17-year high on the LME. The lightweight metal, used to make beverage cans, gained $25, or 1.1 percent, to $2,308 a ton. Earlier it traded at $2,310.50, the highest since January 1989.

Zinc increased $12 to $1,935 a ton after trading at $1,948, the highest in 17 years. Lead rose $11 to $1,088, nickel gained $150 to $14,050 and tin climbed $75 to $6,725.



To contact the reporters on this story:
Simon Casey in London at scasey4@bloomberg.net
Last Updated: January 4, 2006 05:47 EST

Mick100
05-01-2006, 10:25 AM
Long term Energy forcast Updated

Jo Dancy

http://www.financialsense.com/fsu/editorials/dancy/2006/0103.html
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Mick100
18-01-2006, 07:28 PM
China's Major Banks See Bad Loans Decline
Wednesday January 18, 2:06 am ET
By Elaine Kurtenbach, AP Business Writer
China's Major Banks See Bad Loans Decline, As Restructuring Efforts Accelerate


SHANGHAI, China (AP) -- Nonperforming loans at China's major commercial banks fell by 498.5 billion yuan ($61.8 billion) last year, reducing their share of total lending by 4 percentage points, the official Xinhua News Agency reported Wednesday.



The report, citing an unnamed official at the China Banking Regulatory Commission, comes as efforts step up to restructure state-owned lenders ahead of a full opening of China's financial services markets to foreign competition at the end of this year.

Major banks, as defined by the banking regulator, include both state-owned and joint stockholding banks, but exclude credit cooperatives -- known to have much higher portfolios of bad debts -- and foreign banks, the report said.

The report did not provide total dollar figures for the amount of nonperforming loans or total loans at major banks. According to data released earlier, by the end of 2004, the banks had total nonperforming loans worth 1.718 trillion yuan ($212.9 billion), accounting for 13.2 percent of total lending.

International analysts have put the actual amount of irrecoverable loans at a much higher level, although massive state-financed write-offs and bailouts have helped to trim them from their peak a few years ago of as much as half of all lending.

In a report issued Wednesday, the ratings company Standard and Poors described the outlook for the industry as positive.

"Government actions taken in the past two years signify that industry reform is taking a major step forward," said the report, calling the effort a "work in progress."

Yet it noted that the industry was still plagued by bad corporate governance, weak asset quality, low profitability and low capitalization.

Total assets in China's banking system reached 37 trillion yuan ($4.6 trillion) by the end of 2005, up 18.4 percent from a year earlier, the report said without providing comparative figures.

The report said 40 of the country's more than 100 banks had met the regulator's capital adequacy ratio requirement of 8 percent by the year's end, an increase of 10 from the end of 2004.

On Tuesday, the Agricultural Bank of China, the third-largest but weakest of the country's four big state-owned commercial banks, said it hopes to finish restructuring this year but has yet to receive a government decision on a bailout.

The government has spent a total of $60 billion to replenish capital at the other big state banks -- the Bank of China, Industrial and Commercial Bank of China and China Construction Bank.

"We have gotten in line, we're the last and still waiting for a decision," Han Zhongqi, vice president of the Agricultural Bank, told reporters. "The restructuring won't be as fast as the other banks and our problems are larger."

The Agricultural Bank was set up to lend to rural projects and businesses and thus has a wider exposure to bad debts, with its nonperforming loan ratio at 26 percent of total lending at the end of 2005, down just 0.51 percentage point from the beginning of the year.

The bank said it disposed of bad loans worth 46.2 billion yuan ($5.7 billion) in 2005 and plans to write off another 50 billion yuan ($6.2 billion) this year.

Mick100
21-01-2006, 08:59 AM
Unrest in Rural China

http://www.iht.com/articles/2006/01/20/news/china.php?rss

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Mick100
23-01-2006, 12:00 AM
IMPORTANT GUIDANCE FOR GOLD STOCK INVESTORS

Kenneth J. Gerbino

We are currently bullish on gold but the market is volatile and now dangerous. It is dangerous to be out and dangerous to be in. A strategy of survival and common sense is needed to do well in the coming years. 2006 could see some minor and some major corrections in both the metal and the stocks. These could be very painful emotionally and financially. The good news is that the trend for many years should be up.

All commodities have moved up globally in all currencies over the past year. The real world factors that determine commodity prices in the woof and warp of daily world economics, business, international commerce and manufacturing, are indicating that things are simply more expensive in the world. Almost everything is in more demand and the usual basic material supply channels are having a hard time keeping up with the hundreds of millions of new consumers newly created from the developing countries.

What is a Reasonable Price for Gold

It is possible to arrive at a true relative economic value of gold in the U.S. We analyzed, years ago, wholesale price increases since 1789 and based on those increases applied it to the gold price in 1789 and came up with the value of gold in 1980 should have been $280. Gold in 1789 was $20.22 an ounce. In 1933 gold was still $20.22 an ounce. The wholesale price index was also the same in 1933 as it was in 1789. It seems amazing that after 150 years prices were the same. This was because we had a monetary system based on hard money (gold and silver). From 1933 to 1980 wholesale prices went up 14 times. Therefore the logic would be gold should be up 14 times. ($20.22 x 14 = $283. I have rounded it off to $280 to make life easier. In 1980 it reached $850, a very overvalued level.

Using the consumer price index to factor what gold should be valued at in 2005 we arrive at the following formula. Since 1980 the consumer price index has averaged a 3.8% increase per year. This rate of increase applied to the "fair value" 1980 gold price of $280 over 25 years would suggest that in 2005, the relative economic value of gold should currently be $733 an ounce. This implies that gold today is undervalued as a basic consumer commodity. With gold's additional appeal as a monetary substitute and financial insurance asset, one can easily conceive of the price going considerably higher than $733 in the medium term. If this indeed takes place gold mining stocks will enjoy explosive gains.

The World Is Advancing

Despite world problems, economic progress is everywhere as most of the old socialist systems are being thrown out the window by large population countries such as the FSU, Brazil, India and China. The demand for goods and services is overwhelming the traditional supply/demand equations. Natural resources will be one of the most important investment sectors for many years to meet this demand. Remember even with the gross mismanagement and meddling of economies by governments the world is moving ahead.

There is no doubt that a new and powerful commodity bull market is underway with some experts I respect claiming this will be a generational bull market - one that could last 10-20 years. Gold and precious metals like all commodities will also be part of this mega trend. Owning mining stocks that produce or will produce precious metals, copper, zinc, lead, nickel and uranium in the coming years we believe will provide well above average returns. Ditto for oil companies. The problem will be withstanding the volatility.

Don't Be a Sucker

You should avoid the risky and over promoted exploration and junior mining sector dogs that number in the thousands and will mostly be losers except to insiders that sell when you buy. They own their stock for 1-2 cents. Selling to you for 30 cents is a homerun for them. Many could care less if they ever find any gold or silver. Many so called newsletter writers write these dogs up and you have all also received the 16 page promotional mining direct mail pieces which promo

Mick100
23-01-2006, 07:09 PM
AP
Iran Sanctions Could Drive Oil Past $100
Sunday January 22, 6:39 pm ET
By Brad Foss and George Jahn, Associated Press Writers
Oil Could Top $100 a Barrel if U.N. Imposes Sanctions on Iran Over Nuclear Program


A surge in oil prices last week to almost $70 a barrel on concerns about the restart of Iran's nuclear program only hints at what may lie ahead.
Prices could soar past $100 a barrel, experts say, if the U.N. Security Council authorizes trade sanctions against the Middle Eastern nation, which the West accuses of trying to make nuclear bombs, and Iran curbs oil exports in retaliation. A sharp global economic slowdown could follow.




That's the dilemma the United States and European nations face as they decide whether to act. But Iran would also pay a hefty price if the petro-dollars that now represent 80 percent of export revenues are reduced, potentially stirring civil unrest in a nation with a 14 percent unemployment rate.

"They would shoot themselves in the foot," said Mustafa Alani, director of national security and terrorism studies at the Dubai-based Gulf Research Center. "It's one thing to test the market psychology, it's another to take the actual step and stop oil exports."

Iran, the second-largest oil producer within the Organization of Petroleum Exporting Countries, exports roughly 2.5 million barrels per day -- 1 million barrels more than current excess production capacity worldwide. It also controls the strategic Strait of Hormuz, a critical shipping lane in the Middle East.

"Even if Iran pulled a small amount of its oil off the market, say it pulled a half million barrels a day, I could see oil prices literally jumping over the $100 per barrel mark," said James Bartis, a senior researcher at Rand Corp.

But other oil analysts say prices would likely not climb much higher than $75 a barrel before strategic reserves would be released and demand would begin to taper off as economic activity slowed around the world.

So who would be hurt more? The United States and other nations say it would be Tehran and argue against succumbing to economic blackmail in any case. "We cannot be intimidated by economic threats from their side," Sen. Trent Lott, R-Miss, told CNN.

The U.S. Department of Energy estimates that oil exports finance about half of the Iranian government's budget. And while high oil prices have boosted the annual growth rate to about 5 percent, Iran has never really recovered from its 1980-1988 war against Iraq and trade restrictions on sensitive technologies. The Iran Nonproliferation Act, which the U.S. Congress passed in 2000, deters international support for Iran to develop nuclear, chemical and biological weapons programs and missile-delivery systems.

For weeks, Iran's state television has sought to show a people united behind the leadership, showing passer-by on Tehran city streets expressing their support for the country's strivings for nuclear independence.

Still, Alani of the Gulf Research Center questioned "whether the ordinary citizens will be willing to risk sanctions and endure a lot of suffering like the Iraqis suffered for 13 years" under U.N. sanctions.

Oil consuming nations, meanwhile, have at least one ace up their sleeves -- crude reserves. The United States and other members of the International Energy Agency have a combined 1.48 billion barrels of oil in their emergency stocks. That's equivalent to about 600 days of Iran's net oil exports of 2.4 million barrels per day.

OPEC might be able to add 1.5 million barrels per day to world production, mostly from Saudi Arabia. And oil analyst Fadel Gheit at Oppenheimer & Co. in New York said Russia might be able to crank up exports by about 500,000 barrels once its domestic home-heating demand eases.

Gregory L. Schulte, chief U.S. delegate to the International Atomic Energy Agency, accused Iran last week of deceiving the world about its atomic program, declaring that moves to haul it before the U.N. Security Council were meant to deny "the most deadly of weapons to the most dangerou

Mick100
24-01-2006, 09:44 PM
What's going on

George Kleinman

http://www.financialsense.com/editorials/kleinman/2006/0123.html
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Mick100
25-01-2006, 03:41 PM
An article on oil peak
Some good info on bio fuel production
(rather a long read)

http://www.earthpolicy.org/Books/PB2/pb2ch2.pdf
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Mick100
26-01-2006, 12:32 AM
Palladium

Eric Englund

http://www.financialsense.com/editorials/englund/2006/0124.html
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Mick100
27-01-2006, 01:38 PM
Mining Giants to Thrive on Rising Iron-Ore Prices

By Charlotte Mathews
26 Jan 2006 at 10:24 AM EST


CAPE TOWN (Business Day) -- Final iron-ore contract price increases this year could be in the range of 15%-20%, following last year’s record 71.5% increase, commodities analysts said yesterday.

This would enhance the valuation of shares such as BHP Billiton [NYSE:BHP], Rio Tinto [NYSE:RTP; LSE:RIO] and other mining groups.



Numis Securities London analyst John Meyer said in a report he had raised his valuations and target price forecasts for BHP Billiton and Rio Tinto based on a conservative assumption of a 10% increase in iron-ore prices. Bloomberg reported that ING Groep Paris analyst Alain William said annual supply contracts, starting from April 1, would show a 20% price increase.

Last year BHP Billiton’s carbon steel materials division contributed almost a quarter of its turnover and a third of pretax profits, reflecting both higher prices and increased production.

In its December quarter production report released this week, BHP Billiton said iron-ore production had risen 4% compared with the September quarter.

Rio Tinto, whose iron-ore division contributed 18% of turnover and 20% of net earnings in 2004, reported record or near-record production levels at its iron-ore operations in the December quarter, boosted by mine and export expansions.

It said demand remained strong from all markets during the year.

A recent report from Interfax, which could not be confirmed, said several Chinese steel makers had signed short-term supply contracts with two of the world’s three biggest iron-ore producers at $44/ton, which was a 10% increase last year.

This could set the tone for benchmark price increases. The major iron-ore producers announced late last year that they were seeking a 20% increase.

Steel producers had been complaining about rising iron-ore prices as a massive increase in stainless steel production capacity had squeezed margins, Meyer said.

But supply of iron ore was tight, which put producers in a good position to negotiate price increases.

High iron-ore prices and producers’ strong profits were encouraging increases in iron-ore capacity, which could make current prices the peak of the cycle, Meyer said.

New capacity would increase competitive pressures and push down prices in future, particularly with the overcapacity in the steel sector.

“However, iron ore has historically been a profitable business and since production is dominated by Brazil’s CVRD, Rio Tinto and BHP Billiton, there may now be some discipline in the market,” Meyer said.

China accounted for about 31.5% of world steel output, Meyer said, which meant the Chinese were increasingly setting the tone for iron-ore negotiations.

China has predicted gross domestic product will grow 8.8% this year. This suggested that commodity prices could stay at historically high levels and it underpinned Meyer’s positive but slightly cautious outlook for iron-ore prices.

Mick100
28-01-2006, 01:25 PM
Ethanol Could Reduce Fossil Fuel Need, Study Shows

January 27, 2006 — By Maggie Fox, Reuters
WASHINGTON — Ethanol -- alcohol produced from corn or other plants -- is more energy-efficient than some experts had realized and it is time to start developing it as an alternative to fossil fuels, researchers said Thursday.

While some critics have said the push for ethanol is based on faulty science and mostly benefits the farm lobby, several reviews and commentaries published in Friday's issue of the journal Science argue otherwise.

"We find that ethanol can, if it is made correctly, contribute significantly to both energy and environmental goals. However, the current way of producing ethanol with corn probably only meets energy goals," said Alexander Farrell at the University of California Berkeley.

Farrell and collegases.

"(The environmental cost) comes entirely from making fertilizer, running the tractors over the farm and operating the biorefinery," Farrell said.

Better methods now being investigated would use the woody parts of plants, using what is known as cellulosic technology to break down the tough fibers.

"Ethanol can be, if it's made the right way with cellulosic technology, a really good fuel for the United States," said Farrell, an assistant professor of energy and resources.

"At the moment, cellulosic technology is just too expensive. If that changes -- and the technology is developing rapidly -- then we might see cellulosic technology enter the commercial market within five years."

Writing in the same journal, scientists from Imperial College London, Georgia Tech and Oak Ridge National Laboratory in Tennessee said they had teamed up to find ways to make a facility to do that.

Their facility would make a range of fuels, foods, chemicals, animal feeds, materials, heat and power using what is known as biomass -- a collection of renewable plant matter and biological material such as trees, grasses and agricultural crops.

"We're looking at a future for biomass where we use the entire plant and produce a range of different materials from it," Charlotte Williams of Imperial's Department of Chemistry said in a statement.

"Before we freeze in the dark, we must prepare to make the transition from nonrenewable carbon resources to renewable bioresources," her team wrote.

An oil industry expert said it was possible.

"Credible studies show that with plausible technology developments, biofuels could supply some 30 percent of global demand in an environmentally responsible manner without affecting food production," Steven Koonin, chief scientist for BP in London, wrote in a commentary.

"To realize that goal, so-called advanced biofuels must be developed from dedicated energy crops, separately and distinctly from food."

Source: Reuters

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Mick100
03-02-2006, 10:56 AM
Booming China helps commodity prices boom
By John Waggoner, USA TODAY
Commodities are the hottest — well, commodities — on the financial markets today.


By Joe Hermosa, Valley Morning Star/AP

The Standard & Poor's 500-stock index gained 7.8% the past 12 months, but the contents of your sugar bowl have soared more than 100%. Prices of copper, orange juice, oil and cotton have all posted double-digit gains. And the Commodities Research Bureau index, which measures a broad basket of commodities, has gained 23%.

Those big gains have spurred new interest in commodities. The price of a seat on the New York Board of Trade, for example, blasted past the $500,000 mark this year for the first time — and jumped to $650,000 on Tuesday. Volume on the board of trade soared 20% last year. At the Chicago Board of Trade, January volume jumped 22% from January 2005.

What's driving commodity prices? Two words: energy and China.

Consider sugar, up 104% the past 12 months. The U.S. Agriculture Department estimates that worldwide sugar output will rise 3.3 million tons to 144.2 million tons this year. Consumption is forecast at 142.8 million tons, leaving little room for any rise in consumption.

Much of that new demand is not for sweeteners, but for auto fuel. Brazil, the world's largest sugar producer, uses half its sugar output for producing ethanol, an increasingly popular gasoline substitute. Flexible-fuel vehicles in Brazil, which can run on regular gasoline or ethanol, accounted for 46% of Brazil's auto sales last year.

Brazil's ethanol use is being keenly watched by other countries, says C. Harry Falk, president of the New York Board of Trade.

"The world has realized that you can make ethanol out of sugar cane," Falk says. "Thailand, Argentina, India and China are all planning ethanol facilities."

Demand for sugar cane, combined with reduced crops in the USA because of hurricane damage, have sent prices soaring this year.

China's gross domestic product grew 10.1% last year, which is one reason the prices of oil, gas and sugar are soaring. China's growth is pushing up prices of many other commodities, as well.

The extent of building in China is staggering, says Richard Asplund, chief economist for the Commodity Research Bureau.

The Chinese building boom has raised demand for copper, used in wiring and plumbing. And rising concern for the environment has made it hard to open new mines.

"Mine production isn't keeping up with demand," Asplund says.

Copper isn't the only raw material being buoyed by China's prosperity. Nickel and steel prices have surged, too. And cotton prices have gained 27% over the past 12 months.

"As China and India have gotten wealthier, the demand for new clothes has increased," Asplund says.

Coffee prices are booming because of popular tastes. High-end, expensive coffee — the kind that sells for $3 a cup in the USA — is in big demand. As growers produce more expensive java, the supply of standard coffee falls. That drives prices up. Fears of bad weather in coffee-growing regions can send coffee prices soaring.

Big gains on the commodity exchanges have drawn in new investors. But other factors, too, are driving up the volume on commodity exchanges:

•Inflation fears. Rising prices of raw materials can herald widespread inflation, which can devastate stocks and bonds. Investing in commodities can offset some of inflation's damage.

•Speculators. Traditionally, raw materials producers and consumers account for 85% of the activity on the futures exchanges. They use futures to lock in prices and reduce the risk of big increases in raw materials costs. In recent years, though, exchanges have seen activity by hedge funds and other investment firms jump 20% or more, and investors now account for about 40% of the exchange activity, Falk says.

•The dollar. Foreign central banks hold vast amounts of U.S. dollars. Japan, for example, keeps about $736 billion in dollar-denominated assets, according to an estimate by Grant's Interest Rate Observer, a new

Mick100
05-02-2006, 10:53 AM
Bio fuels - are they a realistic substitute for oil;
http://www.financialsense.com/editorials/gue/2006/0203.html
,

Mick100
05-02-2006, 04:37 PM
Commodities bull market
By Scott Wright

http://www.gold-eagle.com/gold_digest_05/wright020306.html
.

Mick100
07-02-2006, 12:04 AM
THE ENERGY SECTOR REMAINS VOLATILE
by Joseph Dancy, LSGI Advisors, Inc.
Adjunct Professor, SMU School of Law
February 5, 2006


The energy market remains volatile, and we expect it will remain so for some time. Some of the recent developments that we think will have an impact on future market and portfolio performance include the following:

As of last week the Gulf of Mexico still had 373,000 barrels a day of crude oil shut in from last years’ hurricanes, or 25% of normal Gulf production. Shut in natural gas production was approximately 1.6 billion cubic feet, or 16% or normal production. Two refineries remain closed due to the hurricane damage.

The Mineral Management Service projects that 255,000 barrels a day and 400 million cubic feet of gas a day will probably not be restored to production prior to the start of the 2006 hurricane season. The economic cost of the disruption, and the cost of repairs, has been incredible – much higher than originally anticipated.

Iraqi oil production fell by 8 percent in 2005, with a sharp decline near year's end that left average daily production at half the 3 million barrels envisioned by U.S. officials at the outset of the war in 2003. Instead of steadily increasing production the annual output fell in 2005 to 1.83 million barrels a day, including a sharp decline over the final quarter - capped by a December dip to 1.57 million barrels daily.

OPEC producer Kuwait's oil reserves are only half those officially stated according to internal Kuwaiti records seen by industry experts last month. The consensus has been that Kuwait holds the world’s fourth largest reserves of crude oil.

U.K. North Sea production continues to decline at a rapid rate according to a recent study by the Royal Bank of Scotland. The Bank reported that the daily average output for oil and gas production in November was down 14 percent compared with a year ago. Oil production fell by 238,000 barrels per day to 1.5 million b/d. U.K. natural gas production is also in decline, and recorded a decline of 14 percent on the year.

Foreign oil companies accustomed to high tension in Nigeria's oil-rich Niger Delta are being forced to grapple with a new level of violence one industry official called "shocking." Nigeria's oil industry, including pipelines, company offices and a pumping station, has been the target of rebel attacks in the past two weeks. As much as 9 percent of the country's oil production has been interrupted. The country is Africa's leading oil exporter and the fifth-biggest source of US oil imports.

The extremely cold weather in Russia last month is likely to knock 2% to 4% off Russian oil companies' first quarter estimated crude oil production figures according to analysts at Aton Capital. Temperatures have averaged -40 C in some key production areas, causing power outages, well shutdowns, and postponing maintenance work.

China’s economy surged 9.9% in 2005, and growth is expected by some experts to accelerate this year. Growth in 2004 was 10.1%, and in 2003 was 10.0% according to official statistics. Some private analysts note that China’s economic growth may have been more in the 12-15% range, with the country downplaying the rapid rate of growth for political purposes.

Due to the dynamic nature of the Chinese economy it is less energy efficient per unit of GNP than that of the U.S. – and total energy use most likely expanded at a rate faster than the rate of economic growth. Longer term, this economic growth is very bullish for energy and commodity prices.

The Reserve Bank of India raised a key short-term interest rate amid higher than expected economic growth. The central bank raised its forecast for economic growth for the fiscal year ending March 31 to 7.5-8.0%. Like China’s vibrant economy, this rate of economic growth will add to global demand for energy and commodity supplies.

OPEC has increased production but has little spare production in reserve, leaving the global oil markets vulnerable to a supply shock. This reserve capacity stands at 1.5

Mick100
08-02-2006, 07:47 PM
The outlook for Energy Commodities

http://www.financialsense.com/editorials/bonneuil/2006/0207.html
.

Mick100
09-02-2006, 11:04 AM
Base metals find feet after fund sell-off
Wed Feb 8, 2006 12:25 PM ET
Printer Friendly | Email Article | Reprints | RSS

By Martin Hayes

LONDON (Reuters) - Major base metals steadied on Wednesday afternoon, recouping earlier sharp losses when investment funds sold a broad range of commodities that hacked up to 13 percent off some prices.

Precious metals and agricultural soft commodities followed a similar path before recovering but mining stocks were badly hit.

Analysts and fund mangers were however not fazed by the latest moves.

"It is good to have corrections. These markets have done so incredibly well it doesn't hurt. I'd hate to say it's the end of a bull run," a fund source said.

Angus MacMillan, Bache Financial minerals strategist said: "It is too early to say whether this is the end of the beginning or the beginning of the end."

On the London Metal Exchange (LME), the world's largest non-ferrous metals market, all metals initially fell sharply as drops in gold and oil triggered heavy sales by investment funds.

Gold <XAU=> fell to $545.80 a troy ounce, but finished European trade near the day's high just above $551.

"I think this is another warning shot that these are going to be very volatile and dangerous times. The dust needs to settle again. There is still money to come in to these markets," the fund source said.

Another fund manager said his fund would continue to invest in base metals, concentrating on zinc, lead and tin.

The LME benchmark contract <MCU3> for copper, extensively used in plumbing and wiring, hit an early low of $4,860 a tonne, before rebounding to $5,005. It finished open-outcry trade at $4,975, unchanged from Tuesday's close.

The metal, which hit a new all-time high of $5,100 on Tuesday, is still up by some 13 percent since the end of 2005, having gained nearly 40 percent that year.

Other metals made an attempt to follow copper's lead, but had to work harder as earlier losses were much steeper.

Aluminum, used to make consumer white goods, registered a 5.8 percent fall from a new 17-1/2 year peak at one point, but finished at $2,605, down only 0.8 percent. Lead, whose main end-use is automobile batteries, had nearly 13 percent wiped off its value in a peak-to-trough move. It finished at $1,270 a tonne, down some three percent.

The earlier sell-off had a more lasting ripple effect on mining shares. Major miners BHP Billiton (BLT.L: Quote, Profile, Research) shed 3.7 percent and Rio Tinto (RIO.L: Quote, Profile, Research) 2.6 percent as the mining sector took about 12 points off the index.(.L: Quote, Profile, Research)

Investment bank JP Morgan said in a note strong demand from China would not be enough to safeguard high-flying metals from the prospect of a bear market, predicting precious metals would outperform base metals this year.

COMMODITIES RIPE FOR SELLOFF

Technical charts, which are used to predict future price moves on the basis of past performance, had signaled that rises were being over-extended, although some felt the latest clean out presented another good buying opportunity.

"Don't miss the boat, again. Supply and demand fundamentals remain constructive for the price up-trends to persist," Barclays Capital said in a daily report.

Base metals have scored successive, almost daily highs, in 2006 on an influx of fresh investment fund money. Many of the latest investors to join the commodity boom -- pension, endowment and mutual funds -- are new to the market.

But while many expect a sudden downturn, predicting the timing of a fall is difficult with the market ignoring fundamentals and the huge volume of cash flowing into the market.

"Fundamentals are just taking a back seat at the moment (to funds)," MacMillan said.

(Additional reporting by Lucy Hornby in Shanghai, Richard Dobson in Taipei, Daniel Magnowski and Clare Black in London)

Mick100
10-02-2006, 03:14 PM
Thorium, an alternative to Uranium

http://www.resourceinvestor.com/pebble.asp?relid=16813
,

Mick100
10-02-2006, 11:41 PM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Ethanol, Boon to Farms, Won't Cure Oil Addiction: John M. Berry
Feb. 9 (Bloomberg) -- Ethanol, touted in President George W. Bush's State of the Union speech as a partial cure for America's oil addiction, is the product of another pernicious habit: subsidizing farmers.

From the beginning, use of ethanol has been sold as a way to lessen the U.S. dependence on foreign oil, which as Bush said in the Jan. 31 speech, is ``often imported from unstable parts of the world.''

In reality, it is a way to boost corn farmers' income, along with that of the industries that supply farmers with machinery, fertilizer and other goods and services.

Even with today's high oil prices, ethanol is too costly to produce to compete with gasoline. To make it viable, the federal government provides a subsidy of 51 cents a gallon when it's mixed with gasoline and sold as motor fuel.

In addition, it takes a lot of energy to grow and transport the corn, the main ingredient of ethanol, and to turn it into a liquid fuel. The latest studies indicate the process consumes about 80 percent as much energy as it produces, though that figure depends on a variety of assumptions such as corn yields and the location of ethanol plants relative to the corn fields.

On the other hand, a lot of the energy consumed is in the form of electricity generated from coal, of which the U.S. has plenty. Another large chunk is from natural gas, which increasingly is in tight supply.

Tariff Help

One big problem with ethanol is that it is more corrosive than gasoline. Gasoline stations need special equipment and tanks, and only a handful of cars and trucks made in the U.S. today can burn fuel that is more than 10 percent ethanol.

To make sure foreign farmers and producers can't get in on the gravy train, there is a ``temporary'' tariff of 54 cents a gallon on imported ethanol on top of an overall tariff of 2.5 percent of its value. Brazil, with a large industry making ethanol from sugar cane, is the main target of the tariff.

If energy security was the overriding consideration in having ethanol available in the U.S., a quick step would be to reduce that temporary tariff. Brazil hardly rates as an unstable part of the world compared with the Middle East.

Unfortunately, that's not what ethanol is really all about, as the clout of the farm lobby demonstrated with the provisions of the American Jobs Creation Act of 2004 and again with the Energy Policy Act of 2005.

Ethanol Subsidy

Prior to passage of the Jobs bill, the ethanol subsidy was in the form of a small reduction in the motor fuel excise tax motorists pay at the pump. The tax on a 10 percent ethanol-90 percent gasoline blend, known as E10, was 14.666 cents a gallon rather than the 18.4 cents on gasoline.

That approach annoyed the highway lobby because it meant somewhat fewer dollars were flowing into the Highway Trust Fund, which helps finance highway construction and maintenance.

So the tax break at the pump was dropped and the larger direct 51-cent subsidy was put in place.

Then last year the Energy Policy Act, which was studded with tax breaks and subsidies for energy production, mandated use of ``renewable fuels'' such as ethanol on a set schedule. This year, 4 billion gallons are to be blended with gasoline and diesel fuel, rising gradually to 7.5 billion in 2012.

There are almost 100 ethanol production facilities today, about 30 more are under construction and dozens more are in various stages of planning, according the American Coalition for Ethanol's Web site. ``Approximately half of the nation's ethanol is made at facilities owned by farmers and other local investors,'' it says.

Sugar Costs

Given the huge subsidy involved, and a government-decreed market, that burst of construction is hardly a surprise.

Brazil itself has weaned itself from oil imports through a huge expansion in its ethanol industry and a government subsidized plan that converted the country's gasoline st

Mick100
10-02-2006, 11:53 PM
Mexican oil output could drop sharply
- Cantarell, Mexico's largest field in decline

http://www.forbes.com/home/feeds/afx/2006/02/09/afx2512329.html

AFX News Limited
Mexican oil output could drop sharply - report
02.09.2006, 05:23 AM





LONDON (AFX) - Mexico's huge state-owned oil company, Petroleos Mexicanos, or Pemex, may be facing a steep decline in output that would further tighten global oil supply and add to global woes over high oil prices, the online edition of the Wall Street Journal reported.

The potential decline faced by Pemex, also could undermine US efforts to reduce dependence on Middle East oil, and complicate Mexican politics and financial stability.

An internal study reviewed by The Wall Street Journal shows water and gas are encroaching more quickly than expected in Cantarell, Mexico's biggest oil field, and might cause output to drop precipitously over the next few years.

Currently, Cantarell produces 2 mln barrels of oil a day, or six of every 10 barrels produced by Mexico, and is the world's second-biggest-producing field after Saudi Arabia's Ghawar.

Pemex says it is confident it can make up for any decline at Cantarell by squeezing more output from other fields, but some analysts outside the company are far less sanguine. The study was carried out last year by Pemex experts.

'I am confident in Pemex's portfolio of assets. Other fields will be able to substitute (Cantarell's output) and increase production,' Juan Jose Suarez Coppel, the company's chief financial officer, said in an interview.

Pemex predicts Mexico's output will actually grow this year to 3.42 mln barrels a day from 3.33 mln barrels last year.

But the study already prompted the company in December to predict a slightly sharper decline at Cantarell than its previous forecasts -- with output down 6 pct this year to an average rate of 1.9 mln barrels a day and off to 1.43 mln barrels as an average for 2008. That prediction now roughly matches the study's most optimistic scenario.
.

Mick100
11-02-2006, 09:37 AM
Reuters
Base metals fall sharply, fund sales cause havoc
Friday February 10, 12:30 pm ET
By Martin Hayes


LONDON (Reuters) - Prices of industrial metals were battered by a fresh round of investment fund sales on Friday, increasing jitters in markets that were still reeling from aggressive selling earlier this week.



On the London Metal Exchange (LME), the world's largest non-ferrous metals market, copper fell as low as $4,770 a tonne from the $5,017 Thursday close, the lowest since January 27, before ending at $4,840, a $177 loss, or some 3.5 percent.

Aluminum (MAL3) hit $2,490 in the sell-off, before ending at $2,530, down $116, or around 4.5 percent, while other major metals zinc (MZN3) lost six percent, lead (MPB3) shed nearly seven percent, while nickel (MNI3) was nearly six percent lower.

"It is the end of the week and there is a lot of nervousness around. The general outlook is still good, but these markets needed a shake-out," an investment fund source said.

Analysts said confidence in a stunning two-year commodity bull market had been rocked by a broad mid-week sell-off that started in mid-week, and sentiment was still nervous.

A rash of selling of metals assets including precious metals and mining equities earlier in the week sparked fears that the boom of investment in commodities was coming to an end.

Renewed buying on Wednesday afternoon and Thursday had gone some way to allaying those fears, but Friday's action underlined how jittery the markets were.

FUNDS REMAIN

Technical charts, which are used to predict future price moves on the basis of past performance, signaled that rises had become unsustainable.

But analysts said new entrants -- pension, endowment and mutual funds -- would keep the run going, with those players happy to buy on dips.

"The (portfolio) money that is waiting in the wings can afford to wait this afternoon -- there might be better buying opportunities next week," the fund source added.

Earlier this week, copper, used in plumbing and wiring, hit all-time highs of $5,100 a tonne and aluminum was at 17-1/2 year peaks of $2,678. Zinc (MZN3), used to protest steel from corrosion, reached a record peak of $2,420, while lead (MPB3), whose main-end-use is vehicle batteries, touched a contract high of $1,435.

In nearly all cases, metals have run ahead of levels justified by fundamentals, due to the sheer weight of investment fund money.

"At some stage the fundamentals will become influential again, but while the funds are willing and able to buy commodities, you have to accept that their patronage is the most influential aspect in the market and will remain so until something knocks them from their current thinking," William Adams of BaseMetals.com said.

GOLD CRASHES, MINERS UNSETTLED

Other financial instruments were hit as well. Gold dropped 2.5 percent, while silver fell over three percent.

Shares in major mining companies have also buckled this week, and on Friday were still sickly (^L - News). Rio Tinto (London:RIO.L - News; Australia:RIO.AX - News) was 86 pence lower at 2,750p, while BHP Billiton (London:BLT.L - News; Australia:BHP.AX - News) fell 50p to 956p. (0#.FTMIN)

(Additional reporting by Richard Dobson in Taipei, Lucy Hornby in Shanghai and Daniel Magnowski in London)

Mick100
12-02-2006, 11:50 AM
Oil steadies as IEA trims demand forecasts
By Kevin Morrison
Published: February 10 2006 11:32 | Last updated: February 10 2006 11:32

Crude oil prices remained relatively flat on Friday following a late sell-off in the previous session, while gold prices were slightly weaker following a solid bounce on Thursday from the three-week low reached earlier in the week.







IPE Brent for March delivery slipped 10 cents to $60.65 a barrel in mid-morning London trade extending a 31 cent decline from the previous session. March Nymex West Texas Intermediate added 5 cents to $62.67 a barrel in electronic trade.

The International Energy Agency, the energy watchdog of developed countries, trimmed overall global demand growth to 1.78m barrels a day for the 2006 year from 1.8m b/d previously. The IEA left its 2006 estimate of 28.6m b/d unchanged for the crude oil supply from the Organisation of the Petroleum Exporting Countries.

The Paris-based agency said weather-related disruptions across the globe, together with supply disruptions in Nigeria and Iraq, cut total global oil supply by 450,000 b/d last month.

It said global oil supply fell to 84.6m b/d in January, only 135,000 b/d lower than in December. The IEA said Opec’s spare oil production capacity was running at a mere 1.4m b/d, though it expected the spare capacity to increased by 0.5m b/d by the middle of the year.

Opec crude oil fell by 65,000 b/d in January to 29.2m b/d.

Gold strengthen to $558.30/$559.00 a troy ounce in mid-morning London trade, from its late quote of $565.70/$566.60 a troy ounce in New York. Traders said today’s session could prove crucial for the near-term outlook ater the weakness earlier in the week. If the price could consolidate above the $550 level, this could set the stage for another move upwards. The US trade data due for release later today is expected to have an impcrt on trading.


============================================

this is the sentence that was the reason for oil prices falling on Friday - rediculous IMO

"The International Energy Agency, the energy watchdog of developed countries, trimmed overall global demand growth to 1.78m barrels a day for the 2006 year from 1.8m b/d previously."
,

Mick100
14-02-2006, 08:34 PM
Resource Cycles
(some good charts)

http://www.gold-eagle.com/editorials_05/chan021306.html
,

Mick100
16-02-2006, 08:34 PM
Wed Feb 15, 11:50 AM ET



VIENNA (AFP) - World demand for crude oil is expected to rise by 1.89 percent in 2006 to 84.64 million barrels per day, OPEC said in its monthly report.



The figure is 0.05 percent lower than the estimated demand of 84.83 million bpd published in the January report of the Vienna-based Organisation of Petroleum Exporting Countries, but higher than the average demand of 83.07 million bpd in 2005.

China's demand is forecast to increase by 6.0 percent to 6.94 million bpd.

US demand will grow by 1.38 percent to 25.81 million bpd, while that of western Europe by a slight 0.43 percent to 15.64 million bpd, OPEC said.

These figures seem to confirm the United States' dependence on the Middle East for oil supplies, at least in the short term, experts say.

In a study published on Tuesday, the British energy research group Wood Mackenzie had said that the United States was suffering a refining deficit and was thus "highly dependent on imports of oil products, particularly gasoline".

US President George W. Bush called on Americans recently to reduce their dependence on gas by 75.0 percent by 2025.

Total projected US demand, according to the OPEC report, is more than half that of all 30 countries in the Organisation for Economic Cooperation and Development, which is put at 50.12 million bpd, a rise of 0.46 percent.

The OECD does not include China and Russia.

The OPEC report said that demand for the oil produced by the cartel's 11 member states should stand at around 28.5 million bpd, a reduction of 0.2 million bpd on the January report.

Average output by OPEC in January stood at 29.6 million bpd, down 0.169 million bpd from December 2005, the report said, citing as usual "secondary sources."

Output from non-member states is forecast to rise by 1.38 percent this year, to 51.53 million bpd, compared to 50.15 million bpd in 2005.

"A key question for the market is whether this higher growth represents a short-lived rebound, or the start of a healthier trend that can be sustained in the coming years," the report said.

Deepwater production is expected to make up over half of the total estimated increase in supply by non-OPEC members and "has potential to reach 5.4 mbd by 2008... underpinned by projects in Angola, Australia, Brazil, Congo, Equatorial Guinea, Malaysia, Mauritania, and US GoM (Gulf of Mexico)," the cartel said.

Average supply from Russia for 2006 is expected to increase by 0.18 million bpd from 2005, to 9.6 million bpd.

"The government now controls some 3 mbd of production and their plan is to maintain modest production growth," the report said.

At opening Wednesday, oil prices were slightly up after falling sharply over the last two weeks.

In New York, light sweet crude for delivery in March, climbed 15 cents to 59.72 dollars per barrel in electronic trade.

In London, the price of Brent North Sea crude for April delivery added 18 cents to 59.70 dollars per barrel.

Tuesday, oil prices fell below 60.0 dollars per barrel for the first time since late December in New York.

Mick100
22-02-2006, 02:40 PM
US crude surges after Nigeria attacks slash output
Tuesday, February 21, 2006 5:35:25 PM
http://www.afxpress.com


LONDON (AFX) - US crude futures continued higher as output in Nigeria remained halted following attacks by militants fighting for more local control of the oil wealth in the world's eighth largest crude producer. At 5.01 pm, March-dated US light crude futures, which did not trade yesterday on account of the US Presidents' Day holiday, were up 77 cents at 60.65 usd. April-dated Brent contracts were down 59 cents at 60.95 usd per barrel, having surged 1.65 usd yesterday to close at 61.54 usd

Sucden analyst Sam Tilley said US crude was was "catching up from yesterday", when Brent surged on the back of attacks that slashed Nigeria's output by some 20 pct or 455,000 bpd

The attacks occurred on Saturday when the Movement for the Emancipation of the Niger Delta (MEND) set fire to Royal Dutch Shells' Forcados export terminal, sabotaged two pipelines and took nine foreign oil workers hostage

The rebels went on to stage further attacks yesterday, blowing up a floating army barracks block, sabotaging another of Shell's crude oil pipelines and forcing the oil major to evacuate all its oil plants in the immediate area

Barclays Capital analyst Kevin Norrish said the risk of foreign companies being forced to withdraw from Nigeria is becoming increasingly real, with the situation set to support prices at least until next year's elections

Including losses from previous attacks, Nigeria, which produces the light, sweet crude favoured by US refiners, has halted production of 601,000 bpd, equivalent to 25 pct of the country's output

Tilley said the unrest "has the potential of lifting oil prices back towards the high 60's as, despite the current glut of crude oil, the lack of spare production capacity has the market on edge"

The global oil market currently has spare capacity of roughly 1.5 mln bpd, which would be insufficient to compensate for total production losses from Nigeria, which exports around 2.5 mln bpd

This lack of spare capacity is supporting prices even though the oil market is technically over-supplied

Yesterday, Kuwaiti energy minister Sheikh Ahmad Fahd al-Sabah said OPEC may need to cut production in the second quarter in order to combat a supply overhang that could reach 2 mln bpd

He also said, however, that if prices continue "as they are now", the cartel will "support stable prices". OPEC meets on March 8 to discuss output levels

Oil prices gained 9 pct in January on rising geo-political tensions in key producers Iran and Nigeria. They more than retraced those gains in the first half of February, however, as attention turned to bulging US energy supplies

While the supply over-hang pushed aside concerns about the Iranian nuclear dispute for now, traders are still closely monitoring the tensions, with compromise talks today between Russia and Iran ending inconclusively

Mick100
25-02-2006, 06:38 PM
Nuclear power back in the mainstream

http://www.financialsense.com/fsu/editorials/2006/0223.html
.

Mick100
25-02-2006, 06:47 PM
The costs of coal Liquification

http://www.financialsense.com/fsu/editorials/2006/0222b.html
.

Mick100
25-02-2006, 06:58 PM
More on biofuels

http://www.financialsense.com/editorials/gue/2006/0222.html
.

Mick100
25-02-2006, 07:19 PM
Captains Log
Jim Puplava

http://www.financialsense.com/captain/log.html
,

Mick100
02-03-2006, 10:32 AM
Bloomberg News

E-Mail This Story Printer-Friendly Format

Copper, Zinc, Coal Prices Forecasts Raised by Merrill (Update1)
March 1 (Bloomberg) -- Copper, zinc and thermal coal price forecasts were increased by Merrill Lynch & Co., the world's biggest securities firm by market value, because of increasing demand and investment funds driving prices higher.

Merrill raised its price forecasts for four base metals, including aluminum and nickel, and thermal coal by between 5 percent and 43 percent, analyst Vicky Binns said in a note today. It made its last price revision in December.

Copper, zinc and other metals rose to records this year, bolstered by economic growth in China that fueled demand for autos, homes and appliances. As much as $200 billion of fund money is invested in commodities, with $30 billion in base metals, Citigroup Inc. said in a Jan. 25 report.

``We, like everyone else in the market, have been caught out by the effect of money flowing into the commodity markets and therefore need to upgrade price forecasts,'' said Sydney- based Binns. Investment demand is being backed by rising consumption from developing countries like China, and developed economies in Europe and Japan, she said.

The price of copper, used in pipes and wires, may average $2 a pound in 2006, 21 percent higher than a previous forecast, Merrill said. The metal has averaged $4,856.60 a ton, or $2.20 a pound, this year on the London Metal Exchange.

``Demand has surprised on the upside in key Chinese and Indian markets,'' said Binns. ``This has combined with supply bottleneck at the smelters to switch our small surpluses in 2006 into small deficits.''

Zinc, Thermal Coal

Zinc, used to protect steel from corrosion, may average $1 a pound, 43 percent more than a previous forecast, Merrill said. That compares with the average price of $2154.2 a ton, or 97.7 cents a pound, this year.

The securities firm also raised its forecast for aluminum, used in cars and planes, by 5 percent to $1.05 a pound for 2006. Aluminum has averaged $2,417.50 a ton, or $1.1 a pound this year.

Merrill Lynch also raised its forecasts for annual thermal coal prices to $48 a ton, from $43 a ton, due to rising rates on the spot market. Thermal coal is used to generate electricity.

``We believe the risks are for higher prices, with coal seen as the preferred source of power in Asia and Europe and with cement production picking up in Japan,'' Binns said. ``Supply continues to experience delays, higher costs and unavailability of truck tyres.''

Zinifex Ltd. and Oxiana Ltd. are expected to be the biggest beneficiaries of higher prices, Merrill said.

The brokerage raised its earnings forecast for Zinifex, the world's second-largest zinc producer, for fiscal 2006 by 50 percent to A$743 million ($552 million).

Oxiana, an Australian copper producer, will likely post 2006 profit of A$298 million, 55 percent higher than earlier predicted, Merrill said.

Merrill Lynch also revised its profit estimates for BHP Billiton and Rio Tinto Group, the world's largest and third- largest mining companies. It raised its fiscal 2006 profit forecasts for BHP by 7 percent to $9.9 billion, and for Rio by 8 percent to $6.6 billion.



To contact the reporter on this story:
Tan Hwee Ann in Melbourne at hatan@bloomberg.net;

Mick100
02-03-2006, 11:41 PM
Oil versus Gold stocks

http://www.financialsense.com/fsu/editorials/2006/0301.html
,

Mick100
04-03-2006, 11:23 AM
Commodity pricing and Risk

http://www.financialsense.com/editorials/gue/2006/0303.html
,

Mick100
07-03-2006, 03:26 PM
The biggest bull market in history

Zapata George

http://www.financialsense.com/editorials/zapata/2006/0306.html
.

moe
08-03-2006, 08:52 PM
I hear today that China are talking about putting a cap on the price that they pay for Australian Iron,etc. A few of the big companies,BHP and alike were down today due to this news.

What does everyone recon, would they go through with it? Or is it a bluff? China would be screwed without it wouldn't they, stadiums to build for olypics,etc

What you think Mick

Mick100
08-03-2006, 09:48 PM
quote:Originally posted by moe

I hear today that China are talking about putting a cap on the price that they pay for Australian Iron,etc. A few of the big companies,BHP and alike were down today due to this news.

What does everyone recon, would they go through with it? Or is it a bluff? China would be screwed without it wouldn't they, stadiums to build for olypics,etc

What you think Mick


I doubt weather many people will be taking the chinese talk very seriously. They tried manipulating the copper price on the LME late last yr and ended up having to cover a huge short position after trying to talk the price down. They had even indicated that they were going to deliver 200000 tons of copper onto the LME, out of their own inventories, to cover this short position but they never did. They knew, like the other players, that they would have to buy it all back again. When it comes to dealing in free markets the chinese almost appear a bit clueless sometimes.

During the 80's and 90's (the commodities bear market) supply was geater than demand and buyers of resources set the price - times have changed. What the chinese seem to have a problem realising is that they can't set the price while demand is outstripping supply - it's a sellers market. Demand is increasing all over the world, not just in china. The chinese will have to pay for the resourses that they import just like every other country.
,

SEC
08-03-2006, 11:43 PM
The Chinese Govt is in la la land if they think they'll succeed on this one. You are right Mick, they need to get a crash course on market dynamics. Where does it end? Next they'll try to put a $40 cap on imported oil.

SEC

Mick100
11-03-2006, 12:18 AM
THE PEBBLE BED MODULAR REACTOR
Cheaper, Safer and Almost Carbon Free
by Kevin McKern
March 8, 2006


Accepting both the peak oil hypothesis and that climate change is real raises questions about the future of nuclear power; its cost, safety and full cycle greenhouse impact. Additionally, as an Australian reader objected to my last item "Nuclear Energy Back in the Mainstream" because I recommended Uranium miners as an investment I feel its important to place my understanding of the facts on the record.

Nuclear reactors generate energy from fission. An atom of uranium splits into two, releasing energy plus two neutrons; and if either of those neutrons hits another uranium atom it can cause that atom to split, which releases more energy and another pair of neutrons, a chain reaction. Most nuclear power today is produced by large PWRs.

According to a 2005 IAEA report, Chernobyl caused 56 direct deaths; 47 accident workers and 9 children who died of thyroid cancer. Additionally it was estimated that as many as 4,000 people may ultimately die from long term accident-related illnesses. Greenpeace, amongst others, dispute that study's conclusions and presume the toll was higher.

Whatever the true toll of the Chernobyl accident, even conceding a worst case scenario, what most characterises the contribution of civilian nuclear power to world energy production is its relative safety compared to all other means of energy production.

In terms of direct deaths per terawatt produced since 1972, Coal killed 342, Hydro 883 and natural gas 85, but only 8 fatalities were recorded per terawatt of nuclear power.(1) In fact, this statistic vastly underestimates the relative hazards of fossil fuels as the indirect deaths from pollution caused by Coal powered stations worldwide is estimated at over 5 million per year.

A 1000 MW(e) coal plant, depending on sulphur content, sends annually millions of tons of Carbon dioxide, 44 000 tonnes of sulphur oxides and 22 000 tonnes of nitrous oxides into the atmosphere causing acid rain and poor human health. Additionally, there are 320 000 tonnes of ash containing 400 tonnes of heavy metals for which abatement procedures themselves produce as much as 500 000 additional tonnes of solid waste that must be disposed of.

If the potential future climate change impact of the billions of tons of carbon emitted yearly from conventional power plants is taken into consideration, the death toll of say, heat waves in Europe or drought in Africa may, sooner or later, need to be added to the already massive indirect costs of conventional power.

Reactor Types

In a Pressurised Water Reactor (PWR), the fuel (ceramic pellets) is packed into fuel rods. Fission heats water to a temperature of about 320 C and via a heat exchanger this heat generates steam that drives turbines in another loop.

The coolant water also serves to slow the neutrons down, allowing them to be absorbed by other uranium atoms, that is, the water acts as the moderator.

PWRs were built based on experience gained building reactors for submarines, where a high power density was required and in theory, if the coolant is lost the chain reaction stops. In practice heat from short lived decay products keep the core hot. A large PWR can produce so much power that without coolant flow the reactor can be damaged and it is this high power density that demands a massive containment structure and safety systems and personnel.

A Pebble Bed Modular Reactor (PBMR) has thousands of pebbles rather than fuel rods. About the size of billiard balls, each micro sphere has a core of enriched uranium, about half a millimetre across, surrounded by three layers, pyrolytic carbon, silicon carbide and graphite. Pebbles are added to the top of the reactor and taken from the bottom. The fuel pebbles removed are inspected and replaced and otherwise returned to the reactor. You do not need to shut the reactor down to refuel, unlike a PWR.

Helium is used as the coolant, entering the core at 482 C and leaving at 900 C. The high temperature of th

Mick100
11-03-2006, 02:41 PM
Two market commentators who I hold in high regard (Marc Faber & Richard Russell) are calling a downturn in the markets - across the board - including commodities

Faber;
http://www.financialsense.com/editorials/faber/2006/0308.html

Russell;
http://www.theaureport.com/cs/user/print/na/244?x-t=pub.view&id=101256
,

Mick100
12-03-2006, 05:10 PM
Base Metal technicals

Adam Hamilton
(a good read as usual)

http://www.gold-eagle.com/gold_digest_05/hamilton031006.html
,

Mick100
12-03-2006, 10:35 PM
I'm on the same page as you GB

I'v been compiling a shopping list and building up available funds over the past couple of months

It's looking like things are going to fall into place and as you say I wouldn't be surprised to see alot of the juniors get clobbered over the next few months.

,

GB
12-03-2006, 10:40 PM
Good stuff Mick-the following is not addressed to anyone in particular- just a late night rant
i have to add that the Chinese can easily succeed in their endeavour to cap the price of steel or whatever commodity they name - if they are unprepared to pay a higher price they will not buy and the seller will have to sell at the rate required or not sell at all- when your biggest customer says jump its normally how high ( think Walmart) (Warehouse)i have read reports that the property market has already started to fall in China - i also disagree with the premise that they will have an ever increasing demand -the premise of China having an ever increasing demand for raw materials is based upon the belief that the buyer of their goods will have an ever incrasing appetite -if as i believe we are about to go into a world wide recession starting in 07 - who will buy their goods in the quantities that we have seen in recent times - they have been around for 2000 years we did not hear from them 10 years ago they were not even on the map- it could well be that they will go quiet for a number of years -to add i wouldnt be surprised to see a new Smoot Hawley tarrif -ala 1930 - the States economy is 2/3 domestic America has enjoyed the relationship of importing deflation and swapping defaltionary items for worthless paper which has helped keep inflation low - two ways
1, importing deflation-
2,by printing more treasuries it has had the affect of flooding the bond market depressing yields- there could come a time soon when both parties think this current relationship stinks-China might want to swap US treasuries for something more tangible and the States may have to politically protect what little maufacturing base they have through protectonism-also they may feel they need to increase inflation after the deflation by reversing the current agreement- China cannot continue the growth rates they have had if suger daddy takes away the punchbowl
as an aside the banking system in China is inherently corrupt and some say terminally flawed- a slow down could well have a dramtic affect on their economy - all hype and no substance-i dont see the approx 900 billion in treasuries being spread among anybody but the communist party and their cronies-sadly the bmw driver might have to go back to the rickshaw for a while

Mick100
13-03-2006, 10:34 AM
quote:Originally posted by GB

Good stuff Mick-the following is not addressed to anyone in particular- just a late night rant
i have to add that the Chinese can easily succeed in their endeavour to cap the price of steel or whatever commodity they name - if they are unprepared to pay a higher price they will not buy and the seller will have to sell at the rate required or not sell at all- when your biggest customer says jump its normally how high ( think Walmart) (Warehouse)i have read reports that the property market has already started to fall in China - i also disagree with the premise that they will have an ever increasing demand -the premise of China having an ever increasing demand for raw materials is based upon the belief that the buyer of their goods will have an ever incrasing appetite -if as i believe we are about to go into a world wide recession starting in 07 - who will buy their goods in the quantities that we have seen in recent times - they have been around for 2000 years we did not hear from them 10 years ago they were not even on the map- it could well be that they will go quiet for a number of years -to add i wouldnt be surprised to see a new Smoot Hawley tarrif -ala 1930 - the States economy is 2/3 domestic America has enjoyed the relationship of importing deflation and swapping defaltionary items for worthless paper which has helped keep inflation low - two ways


The FED kicks off the next reccession
http://www.financialsense.com/fsu/editorials/mchugh/2006/0311.html

GB, I think that the US is headed for a reccession but that dosen't mean that there will be a world reccession. The business cycles of the European countries, excluding the UK, tend to track the German economy, not the US. Japans business cycles certainly don't track those of the US. The european economies and Japan are looking stronger than they did a year ago. My point is that demand for chinese production comes from the whole world , not just the US.

You also have to consider the increased demand coming from within china itself for chinese produced goods. China has a middle class of around 200 million I think

Alot of the demand for commodities in china comes from the developement of infastructure carried out by the govt. I can't see this developement stopping just because there is a reccession in the US. The chinese govt. would risk civil unrest if they stopped the industrialisation of china - it's not an option for them.

Walmart and Wharehouse can always find another supplier if current suppliers don't give in to their demands. China has not got that option when it comes to securing supplies of raw materials that they need. They either pay the world price or drastically reduce the amounts that they are using and I can't see the latter happenning
,

GB
13-03-2006, 12:12 PM
We disagree on the above but thats all good - discussion is the key and i know we both agree on the gold deal- good stuff cheers Mick -GB

Mick100
14-03-2006, 01:46 PM
There's alot of talk going around at the moment about oil dropping to the mid 50's
The daily oil chart is displaying a near perfect H&S pattern which is a trend reversal pattern for the TA people.
I'd just like to point out that, from my amiture point of view, this trend reversal formation is not complete until the price action breaks below the neckline which hasn't happened yet.
http://www.freecharts.com/Commodities.aspx?page=chart&sym=CLJ6
,

Mick100
14-03-2006, 07:21 PM
Asia

E-Mail This Story Printer-Friendly Format












Uranium May Lead Rally in Metals on Revival in Nuclear Power
March 13 (Bloomberg) -- Nuclear energy's revival can best be seen in uranium, which outperformed the metals markets in 2005 and may do so again this year.

Uranium is poised to climb 27 percent to $50 a pound in the next six months because ``there's not a lot of uranium available,'' said Jean-Francois Tardif, who put 8.4 percent of his C$300 million ($259 million) Sprott Opportunities Hedge Fund LP into uranium. The Toronto-based fund jumped 39 percent in 2005, when its peers on average returned 9.3 percent, according to Hedge Fund Research Inc. of Chicago.

Wellington Management Co. of Boston, which oversees $521 billion, in the fourth quarter raised its stake in Saskatoon, Saskatchewan-based Cameco Corp., the largest uranium producer. The fund holds 13.6 percent of Cameco worth C$2 billion, according to Bloomberg data. The Anglican Church in Sydney took uranium off a list of unethical investments last year, and its funds benefited from a 23 percent gain in BHP Billiton, the No. 4 uranium miner.

Uranium last year gained 76 percent, beating all but one of the 19 commodities in the Reuters/Jefferies CRB Index. Only sugar jumped more.

Not even zinc, the favorite this year among commodity specialists surveyed by Bloomberg News in January, will keep pace with uranium. Analysts surveyed then said zinc would offer the best return from the six primary London Metal Exchange markets, advancing 21 percent.

Nuclear Comeback

Just 60 percent of the uranium consumed in the world's nuclear reactors is mined each year. Without supplies from stockpiles and recycled from Russian warheads, the energy industry wouldn't have enough uranium to keep all of its plants running.

Demand for nuclear power is increasing in China and India because of rising prices for oil, gas and coal. Finland is building a new reactor, and utilities in France and the U.S. are considering additions. Concern that the burning of fossil fuels contributes to global warming is accelerating the push.

Bob Mitchell, the manager of a hedge fund that invests in wholesale uranium, is so bullish that he turned down offers from mining companies to buy his entire inventory. He wouldn't identify the companies or give details on his holdings.

``I remain a buyer of uranium,'' said Mitchell, 52, of Adit Capital Management LP in Portland, Oregon. Mitchell said he began buying uranium in November 2004 at $20 a pound amid reports that some power companies were moving to replenish their inventories. Uranium ended last week at $39.25 a pound, according to Metal Bulletin.

Speculators ``have taken out whatever slack exists in the market,'' said James Cornell, president of RWE Nukem Inc., a trader of uranium and unit of RWE AG of Essen, Germany's second- largest utility. Investors are ``getting to available supplies of uranium before the utilities.''

`A Rebirth'

After three decades of stagnation, the nuclear industry may receive more than $200 billion of investment by 2030, according to the International Energy Agency in Paris. As well as the 24 reactors now being built, another 41, with a capacity of almost 43,000 megawatts, have been ordered or are planned, according to the World Nuclear Association in London.

About a ton of uranium fuel is used every two weeks to supply a 1,000-megawatt power station, according to Australia's Uranium Information Center. About nine tons of uranium oxide would be needed to make the fuel.

``The nuclear industry is currently undergoing a rebirth,'' said Paul Gray, an analyst at Goldman Sachs in London. ``The uranium market will remain tight for at least the next three years.''

Gray was among the Goldman Sachs analysts who at the start of last year correctly predicted uranium prices would extend their advance.

Mining Turnaround

Uranium's surge has revived interest in mining, threatening to end the rally.

London-based Rio Tinto, the worl

Mick100
14-03-2006, 07:26 PM
Asia

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China Curbs Iron Imports as Suppliers Increase Prices (Update1)
March 14 (Bloomberg) -- China, the world's biggest steelmaker, said it has curbed iron ore imports because price increases by suppliers have damaged ``long-term cooperation.''

``Temporary technical measures'' against imports of the steelmaking material have achieved the ``expected effect,'' the Ministry of Commerce said in a statement on its Web site last night. It didn't say when or how it had limited iron ore imports.

Chinese steelmakers including Baosteel Group Corp. are now locked in annual talks over iron ore prices after they rose to a record last year, eroding profits. Mining companies including Cia. Vale do Rio Doce, BHP Billiton and Rio Tinto Group want further price increases this year as demand soars in China, the world's fastest-growing major economy.

``The Chinese are proving a formidable force,'' Alfred Wong, who helps manage $15 billion at UOB Asset Management including resources stocks, said in Singapore. ``They're trying to bring down prices, but it's too early to say if they will succeed. The producers are saying prices should be set by the market.''

Vale, BHP and Rio Tinto account for about three quarters of seaborne iron ore trade, and the prices they set with steelmakers become the global benchmark. Prices jumped 71.5 percent last year because of rising demand from Chinese steelmakers. Suppliers are seeking another increase.

Kumba Resources

Kumba Resources Ltd., the world's No. 4 iron ore producer, has said prices may rise by another 10 percent as global demand outpaces supply. Baosteel, China's largest steelmaker, is leading the nation's 16 biggest producers in talks with mining companies. Baosteel said March 7 it ``definitely won't agree'' to demands to increase prices.

``The Chinese are saying we won't give in without a fight, and they don't want to back down,'' Rob Clifford, an analyst at ABN Amro Holding NV., said in Melbourne.

China probably capped prices during annual talks between miners and steelmakers, traders including Panzhihua Iron & Steel Group's Wang Chaoyun said March 7. China imposed a ceiling on iron ore prices at about $54 a metric ton for imports from Australia and $70 for those from Brazil, including freight charges, traders said.

``China has imposed import restrictions because some foreign suppliers, participating in the contract negotiations, are selling in the cash market at high prices,'' the ministry said in the statement. ``Their behavior has ruined long-term cooperation between the two sides.''

Smaller Steelmakers

China will also bar the supply of iron ore to smaller steelmakers, which typically buy most of their ore on the spot market and are blamed for being the industry's worst polluters, the ministry said.

Australia's government called China's ambassador to a meeting in Canberra on March 9 to protest the nation's cap on import prices. The Department of Foreign Affairs and Trade asked China's Ambassador Fu Ying to remove any price cap, a department spokeswoman said.

Ian Head, a Melbourne-based spokesman for Rio Tinto, the world's second-largest iron ore exporter, declined to comment. Rio Tinto and partners exported 67 million tons of iron ore to China in 2005, with the country accounting for 47 percent of the company's total exports of the material.



To contact the reporters for this story:
Helen Yuan in Shanghai at hyuan@bloomberg.net;
Tan Hwee Ann in Sydney at hatan@bloomberg.net
Last Updated: March 14, 2006 00:15 EST

winner69
14-03-2006, 08:25 PM
Good stuff here Mick and GB .... even though sec seems to be the only other person joining in the discussion

SEC
14-03-2006, 08:46 PM
I don't tune in to this thread much W69 - too much idolising of gold for my liking.

Still reckon the easist money from resources is to invest in the construction/consulting/equipment companies servicing the sector, eg WorleyParsons up 40% in a month.

I did like the article about coal gasification. It shows that the technology is economically viable at current oil prices. Coal has a very bright future if sequestration proves effective - oil (out of the ground) and uranium look likely to run out within 50 years.

SEC

Packersoldkidney
14-03-2006, 09:01 PM
quote:Originally posted by SEC

I don't tune in to this thread much W69 - too much idolising of gold for my liking.

Still reckon the easist money from resources is to invest in the construction/consulting/equipment companies servicing the sector, eg WorleyParsons up 40% in a month.



Doubled since October, Sec.

Echo the sentiments of Winner69 about this thread.

A few of the iron hopefuls will come off a bit in price you'd think....got my evil on on RHI.

SEC
14-03-2006, 11:47 PM
quote:Originally posted by Packersoldkidney

A few of the iron hopefuls will come off a bit in price you'd think....got my evil on on RHI.


My style is to look at the miners (not the explorers - too much risk for my liking, sorry Mr Kidney) so have my eye on PMM and MGX. PMM has dropped nearly 1/3 since early Feb and I'm getting very interested (despite its illiquidity).

SEC

Packersoldkidney
15-03-2006, 01:05 PM
quote:Originally posted by SEC


quote:Originally posted by Packersoldkidney

A few of the iron hopefuls will come off a bit in price you'd think....got my evil on on RHI.


My style is to look at the miners (not the explorers - too much risk for my liking, sorry Mr Kidney) so have my eye on PMM and MGX. PMM has dropped nearly 1/3 since early Feb and I'm getting very interested (despite its illiquidity).

SEC


Whatever makes you money, SEC....PMM look as if it might tumble a bit further yet; problem is, as you say, getting your hands on a decent sized stake at a low price.

Mick100
16-03-2006, 06:47 PM
AP
China Says It Will Protect Steel Makers
Wednesday March 15, 5:53 am ET

China Says It Will Protect Steel Makers if Rising Iron Prices Are Deemed 'Unreasonable'


BEIJING (AP) -- China's government on Wednesday expressed concern at soaring iron prices and warned that it would take unspecified measures to protect its steel makers if talks with foreign suppliers of iron ore fail to produce reasonable prices.

China's iron ore imports from Australia, Brazil and other producers have risen 37 percent over the past year amid high demand for steel for manufacturing and building.

Prices have jumped 71.5 percent during the same period.

"The government will pay close attention to iron ore price talks and take necessary measures if prices are unacceptable and unreasonable," the Ministry of Commerce said in a statement on the government's main Web site.

Chinese buyers are in the midst of price talks with leading suppliers BHP Billiton Ltd. and Rio Tinto Group of Australia and Brazil's Companhia Vale do Rio Doce.

The Commerce Ministry didn't say what it might do. But the official newspaper China Business News said Wednesday that Beijing was considering reducing the number of companies licensed to import iron ore in order to tighten its control over the market.

In Australia, Resources Minister Ian Macfarlane earlier expressed alarm at reports that China was considering trying to cap prices of iron ore imports.

"There is no place for price caps in a commercial market," Macfarlane said.

China imported 51.5 metric tons of iron ore in January and February, according to Customs data released Wednesday.

moe
16-03-2006, 09:56 PM
So do China hold enough weight to cap the price?

If they say "we are not paying any more than $x for iron" what will these companies do?

Is it a matter of who will call whose bluff first?

SEC
16-03-2006, 10:33 PM
quote:Originally posted by moe

If they say "we are not paying any more than $x for iron" what will these companies do?


Sell into the spot market.

Packersoldkidney
16-03-2006, 10:58 PM
quote:Originally posted by moe

So do China hold enough weight to cap the price?

If they say "we are not paying any more than $x for iron" what will these companies do?

Is it a matter of who will call whose bluff first?



China have 45% of the market I think.....since its a 'fixed' price, all China have to do is act tough until contract negotiations cease and they get the price they want. You'd find if the BHP's and the Rio's ganged up together, China would have no leg to stand on...my bet is that is exactly what will happen. The price will be much closer to what the miner's want than what China wants. China has to have that iron....the miners know it.

Mick100
16-03-2006, 11:13 PM
It sounds as though the chinese govt is going to shut down the smaller independent steel makers who they blame for buying iron ore on the spot market and driving up prices. This would cut back aggregate demand in the short run but it will mean that china will have less steel in the long run. I understand they hold a couple of months supply in inventories so they may be able to play thier games for a while but in the long run they need the iron ore and will have to pay up. I agree with you packers
,

Packersoldkidney
16-03-2006, 11:53 PM
quote:Originally posted by Mick100


It sounds as though the chinese govt is going to shut down the smaller independent steel makers who they blame for buying iron ore on the spot market and driving up prices. This would cut back aggregate demand in the short run but it will mean that china will have less steel in the long run. I understand they hold a couple of months supply in inventories so they may be able to play thier games for a while but in the long run they need the iron ore and will have to pay up. I agree with you packers
,


China will have to come to the table; command economies like China's require 'fixed' amounts of materials so they can work. If the big boys just say "no iron for you unless its at this price", I doubt there is much China could do about it. I guess we'll see.

Mick100
19-03-2006, 11:49 PM
Long term outlook for oil demand

http://www.financialsense.com/fsu/editorials/dancy/2006/0318.html
,

airedale
20-03-2006, 07:47 PM
Hi Mick, 1,000 barrels/second. That is a very catchy [8D] number.

SEC
20-03-2006, 10:20 PM
A shrine where all gold bugs on this site can make their pilgrimmage:

Theme park that glitters


Beijing
March 19, 2006 - 6:01PM

Gold-hungry China plans to open what it has billed the world's first theme park dedicated entirely to the precious metal, state media reports.

Construction of the theme park started on Saturday near a working mine at Rushan city, east China's Shandong province, the Xinhua news agency said today.

When the 3.6-square-kilometre, $US25 million ($A33.93 million) park is completed, it will allow visitors to watch gold being mined and processed.

It will also include a DIY area where the visitors themselves can be gold miners for a day, according to the agency.

China is the world's third-biggest market for gold after India and the United States, according to the World Gold Council, an industry organisation.

Last year, Chinese demand for gold rose eight per cent to more than 250 tonnes, the council's data showed.

Gold plays an important role in Chinese culture and is evident everywhere from temple decorations to the jewellery of newlyweds and the dental cavities of the rich.

Last year, the China Economic Daily issued a special edition, published in gold. It came in two versions, the more expensive priced at $US8,300 ($A11,265) and using 500 grams of gold.

AFP

Mick100
20-03-2006, 10:28 PM
"Theme park that glitters"

Sounds almost as good as shantytown
(down on the West Coast, South Island)
,

SEC
23-03-2006, 11:45 AM
quote:Originally posted by SEC

The Chinese Govt is in la la land if they think they'll succeed on this one.


The Chinese Govt is backpedalling already - it was never going to succeed in its quest to manipulate iron ore prices. The miners would sell elsewhere.

SEC

Mick100
28-03-2006, 01:05 AM
Oil stock trends
-By Adam Hamilton

http://www.gold-eagle.com/gold_digest_05/hamilton032406.html
,

Mick100
28-03-2006, 07:53 PM
Are any of you commodity bulls interested in agricultural products - wool, meat, grains, dairy
I know that they are renewable resources which puts some people off them

They appear to be at the bottom of their cycle price wise right now - maybe a good time to think about taking a position.

Any thoughts?
,

Packersoldkidney
28-03-2006, 08:33 PM
quote:Originally posted by Mick100


Are any of you commodity bulls interested in agricultural products - wool, meat, grains, dairy
I know that they are renewable resources which puts some people off them

They appear to be at the bottom of their cycle price wise right now - maybe a good time to think about taking a position.

Any thoughts?
,


Dunno, Mick.....some commodities can stay down for a hell of a long time; would be interested to see if you've come across any articles lately that address the issue.

I honestly think the bull market in gold and silver has a long way to go....and if this thing goes through with China next week, we have only just started to see the beginning of the uranium bull market. There is enough (ahem) bull around now not to saddle yourself by taking a stake in a market that may not fire for some time.

Mick100
28-03-2006, 10:27 PM
I haven't read much at all on the agricultural commodities packers. The grains are doing poorly on the comex but sugar is going ballistic - energy related I guess (enthanol)
With the growing middle class in china surely they are going to be seeking a bit more protien in thier diets. Their main source of meat at present is chickens and the bird flue is well established in aisea so they may turn to NZ/OZ diary and meat products for their protein
I must admit that in previous commodity bull markets the agricultural commods have been the last to fire. As you say, I may be jumping the gun on this one
.

Mick100
29-03-2006, 11:44 AM
Copper Rises to a Record in London After Inventory Declines

March 27 (Bloomberg) -- Copper futures rose to a record on the London Metal Exchange for a third consecutive session after inventory dropped, reducing supply of the metal used to make power cables and pipes.

Copper for delivery in three months on the LME increased as much as $30, or 0.6 percent, to $5,280 a metric ton, and was at that price as of 7:37 a.m. London time. That beat the previous record set March 24 by $4.

Inventory tracked by the LME and commodity exchanges in New York and Shanghai slumped 7.7 percent last week to 190,187 tons, a seven-week low, according to data complied by Bloomberg.
,

Mick100
31-03-2006, 09:03 PM
Commodities boom raises fears
Published: March 29 2006 22:10 | Last updated: March 29 2006 22:10

The commodity price boom of the past three years has aroused investor attention on an unprecedented scale, with most investors placing their funds into passively managed commodity indices.







About $80bn is estimated to be in funds tracking the main commodity indices – the Goldman Sachs Commodity Index, AIG-Dow Jones, the Reuters/Jefferies CRB index and the Deutsche Bank Commodity Index – up from $15bn three years ago.

This has been spurred by record-breaking runs for oil prices, natural gas, copper and zinc, together with long-term highs for gold, sugar, aluminium and silver.

The funds tied to commodity indices swamp the estimated $10bn that pension and mutual funds have allocated to actively managed commodity hedge funds.

More funds may be on the way: consultants such as Mercer and Watson Wyatt are advising UK pension funds to allocate more money to commodity funds.

Yet fund managers and analysts are concerned that the index funds may eventually be a victim of their own success: the weight of money they have funnelled into commodity markets has contributed to severe price distortions.

The GSCI has risen 160 per cent in the past five years, buoyed by strong gains in commodity prices. However, commodity index levels are based not only on price movements of the underlying commodity futures, but on the rolling yield.

Most nearby dated futures contracts expire each month so investors have to sell the contract that is coming up to expiry and purchase the next deliverable monthly contract. The difference between the sale and purchase is known as the rolling yield. This has mainly been positive in the past four years, a situation known as backwardation.

However, with more money flowing into commodity indices, the yield is turning negative, creating what traders know as a contango. Here, nearby prices are below those of contracts for later delivery.

A contango can be a sign of temporary surplus in physical commodity markets, and it encourages inventory building.

However, crude oil futures markets have been in contango for the past 12 months, as the oil price has hit record highs and remained close to $60 a barrel, reflecting market worries about the security of future supplies rather than about oversupply.

The contango in the crude futures markets, West Texas Intermediate and Brent, have a big impact on the commodity indices. Together they represent 45 per cent of the GSCI. Other energy futures are in contango: heating oil, US natural gas, UK gasoil as well as other commodities including gold, wheat and coffee. In all, commodities representing more than two-thirds of the GSCI weighting are in contango.

Michael Lewis, head of commodities research at Deutsche Bank, said both the GSCI and AIG-Dow Jones index were down 5 per cent so far this year, entirely due to the negative roll yield. Mr Lewis said last year’s 40 per cent gain in WTI and Brent prices outweighed the 20 per cent negative roll yield.

With the WTI in contango until June next year, commodity indices will be relying on future positive performances from commodity prices that are already at or near record levels. “Oil prices would have to reach $77 in order for the energy component of the GSCI to break even,” said Mr Lewis.

David Mooney, portfolio manager at NewFinance Capital, a fund of commodities funds, said the contango in oil was a result of new money going into the crude futures market.

“These commodity indices are a one-way bet. They are long only and do not offer the flexibility that more active commodity funds can offer,” said Mr Mooney.

Douglas Hepworth, director of research at Gresham Investment Management in New York, said more worrying was the predictability surrounding the funds’ rolling of their exposure from the nearby futures contract into the next. Funds tracking the GSCI roll their contracts from the fifth to the ninth business day of each month.

“The whole market knows when these guys

Packersoldkidney
31-03-2006, 09:47 PM
Read a good article in Your Trading Edge magazine, Mick, about trading commodities via options....worth a look. The March/April edition, about 9 quid, but worth it.

Mick100
01-04-2006, 10:03 PM
No end in sight for commpdities Bull

http://www.resourceinvestor.com/pebble.asp?relid=18359
.

trader10
02-04-2006, 08:38 PM
Commodity prices on a roll as demand rises

By Barbara Hagenbaugh, USA TODAY

WASHINGTON — Commodity prices are rising rapidly, a factor that could lead to higher consumer prices and overall inflation in the U.S. and world economies.
Commodity prices rose to a 71/2-week high Thursday and are up 8.5% from a year ago, according to the Commodity Research Bureau.

Prices for energy, metals and agricultural goods have all risen as demand for commodities has increased in a growing world economy. At the same time, supplies have remained relatively stagnant.

Unless the global economy changes dramatically, prices likely will continue to rise, says CRB chief economist Richard Asplund.

"The current commodity bull market is far from over," he says.

But Michael Helmar, senior economist at Moody's Economy.com, says the combination of an expected slowing in the world economy to a more sustainable pace and an increase in supplies to meet demand will lead to a softening in commodity prices in the second half of 2006.

Federal Reserve policymakers cited "elevated prices of energy and other commodities" as risks for inflation in their post-meeting statement Tuesday. Previously, the Fed, which raised interest rates for the 15th-consecutive meeting this week, had named energy prices but did not mention commodities.

That suggests the Fed is keeping an eye not just on energy but on rising prices for metals, David Rosenberg, chief North American economist at Merrill Lynch, said in a note to clients.

Bear Stearns senior economist Conrad DeQuadros says higher commodity prices are starting to be seen in prices of products at the intermediate, but not final, stage of production.

The big question is if those higher prices will begin to be seen by consumers or if they will continue to be absorbed by firms selling their products in a highly competitive price environment.

"Those increases could then eventually be passed along to the consumer," DeQuadros says.

Prices have been up for a variety of commodities:

•Metals. Metals prices are up nearly 30% from a year ago as a variety of metals products are sought for construction products, particularly in China, where an urban building boom is underway. Copper prices recently hit an all-time high, and gold, silver and platinum prices are all up by double digits.

•Energy. Oil prices have risen nearly 10% this month and wholesale gasoline costs have also increased. Analysts, including those at First Enercast Financial and Alaron Trading, say oil prices will likely climb higher because of strong demand.

•Agriculture. Prices for a number of agricultural goods have risen rapidly this year, particularly for products such as sugar, that are being used to make renewable fuels, such as ethanol.

http://www.usatoday.com/money/economy/inflation/2006-03-30-commodity-prices_x.htm

T10 [8D]

trader10
02-04-2006, 08:45 PM
Oil, gold prices to continue up

San Francisco: The closely watched financial website MarketWatch.com said this morning that political and economic uncertainty will drive commodity prices higher in the short term. Look for $70 oil and gold trading at 25-year highs near, or over, $600.

A weekend analysis of the first quarter by MarketWatch writer Myra P. Saefong said that while anything is possible - this is "a market that's been known to trade contrary to fundamental factors" - the likely direction for commodities like crude and gold is to watch the first-quarter gains of mutual funds dedicated to natural resources and precious metals.

Figures from Morningstar Inc showed that precious metals funds rose an average of 17.4% while funds of natural resources added 8.7% for the year through March 29.

Peter Grandich, editor of Grandich Publications has commented that, "It's clearly unfashionable, if not suicidal, to be bearish on oil, but from a contrarian standpoint, it's the only position to be in."

Still, US government data show that crude inventories stand at their highest level since April 1999.

The MarketWatch.com column is at (copy and paste into your browser)

http://tinyurl.com/nff8n

It continued, in part:

Even so, May crude futures closed above $67 a barrel Thursday for the first time in two months with fresh tension between Western countries and Iran over Tehran's nuclear activities fueling the rally.

Prices aren't that far from the front-month futures record of $70.85 a barrel set on Aug. 30 and they're up over $4 so far this year.

Meanwhile, precious-metals prices have climbed to new heights, with gold and silver futures at levels not seen since the early 1980s.

"Gold as well as silver continues to benefit from a robust global growth pattern and consumption of all types of commodities," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.
Gold futures closed Thursday at close to $592 an ounce -- up 12% year to date, and silver futures neared $12 an ounce, up 30% year to date.

Hardly anything could ruin the outlook for the metals - except perhaps world peace, said Thomas Hartmann, an analyst at Altavest Worldwide Trading, who sees higher prices for gold and silver by the end of the second quarter.
Summer weather and tension surrounding Iran remain major factors in the outlook for energy commodities.

http://tinyurl.com/nff8n

http://www.bangkokpost.com/breaking_news/breakingnews.php?id=88537

T10 [8D]

trader10
02-04-2006, 08:53 PM
The Associated Press/NEW YORK
By VIVIAN CHU
AP Business Writer

"Metals producers surge as prices climb"

MAR. 30 3:08 P.M. ET Shares of metals producers surged on Thursday, as traders pushed prices of gold, silver and other metals to their highest levels in more than two decades on speculation that precious metals prices will stay strong.

On the New York Mercantile Exchange, gold prices climbed $9.50 to a 25-year high of $588.10 an ounce, while prices for silver rose 29 cents to $11.40 an ounce, a 22-year high. Copper prices rose 4 cents to a record high of $2.47 while platinum and palladium also gained.

Metals prices have rallied over the past year as investors bet the price of gold, silver and other precious metals will keep climbing.


Investors typically buy gold and other metals during times of geopolitical uncertainty or to hedge against inflation or a weakening currency, but recent bullish sentiment toward metals has been driven more by speculative activity and not by industry fundamentals, said Tim Evans, senior commodity analyst for IFRMarkets, part of Thomson Financial in New York.
"What's really going on here is that investors are fearful they'll miss out on further gains, so they're just chasing the market," Evans said. "I would strongly caution people about simply joining this rally without thinking twice about how much risk they're taking. High prices also mean high risk," he said.

In afternoon trading on the New York Stock Exchange, shares of Barrick Gold Corp. rose 87 cents or 3.3 percent, to $27.57, Anglogold Ashanti Ltd. shares rose 95 cents or 1.8 percent, to $53.23, Gold Fields Ltd. shares rose $1.09, or 5.2 percent, to $22.10, Goldcorp Inc. shares rose 93 cents, or 3.3 percent, to $29.51, Harmony Gold Mining Co Ltd. shares rose 36 cents, or 2.3 percent, to $16.19, Glamis Gold Ltd. shares rose $1.41, or 4.5 percent, to $32.59 and Newmont Mining Corp. shares rose $1.32, or 2.6 percent, to $52.81.

A pair of bullish broker notes on two big metals producers reinforced positive sentiment toward the sector.

Earlier Thursday, Morgan Stanley analyst Wayne Atwell raised his rating on Freeport McMoran Copper & Gold Inc.'s stock to "Equal-weight" from "Underweight," citing an improved outlook for the copper market. The company is one of the world's largest copper and gold producers and majority owner of a massive mine in Indonesia producing gold, copper and silver.

Atwell predicted Freeport's stock price would benefit from a growing risk of supply shortfalls this year and next, which he said will push copper prices higher.

"We believe a robust outlook for the copper market and recent strength in gold will continue to offset near-term concern over below-budget production levels in the first half of 2006," he wrote in a client note. Copper prices will likely stay above the key $2 per pound level until 2008, he added.

Separately, Lehman Brothers analyst Christopher LaFemina raised his earnings estimates for Rio Tinto PLC, the London-based diversified mining company with interests in copper, gold, diamonds and iron ore, due to expected gains in copper prices.

In a client note, LaFemina predicted copper prices would stay high as labor disruptions, equipment shortages, and high utilization rates at existing mines would contribute to unexpected supply disruptions. "With a relatively strong demand outlook, copper prices are likely to continue to exceed consensus estimates," he wrote.

Silver prices have also been bolstered by talk of a new silver exchange-traded fund, or ETF, that Barclays Global Investors is expected to launch shortly. That fund, now waiting for approval by securities regulators, is expected to trade on the American Stock Exchange.

Rio Tinto shares rallied $9.67, or 5 percent, to $208.66, while Freeport shares gained $1.42, or 2.4 percent, to $61.12


http://www.businessweek.com/ap/financialnews/D8GM3LU80.htm?campaign_id=apn_home_down&chan=db

T10 [8D]

trader10
02-04-2006, 09:18 PM
sorry cujodog,

But I JUST CAN NOT AGREE WITH YU ON THIS.....

Maybe the other way around ?????

WE in Australia are blessed by resources and until at least 2008 we will be smilling big time......

You watch and see.....

US does not have resources like here in AUS.....US are only good atm in making enemies around the world .....


GO AUSSIE GO !

T10 :D:)

trader10
02-04-2006, 09:38 PM
Agree cujo,

But, little adjustments like happened in FEB already and rises..... just like a TA- chart..... FACTS - That is = demand for raw materials atm....

Inevitable a correction sometime but not just now....and of course IMHO.....

T10 :)

Mick100
03-04-2006, 12:31 AM
COMMODITY FUTURES FORECAST WEEKLY REPORT


COMMODITIES GONE WILD!

Philip Gotthelf

(March 30, 2006) With silver rocketing to multi-decade highs and gold roaring forward with platinum and palladium on its heels, the media is awash in "reasons" for the commodity market boom that permeates everything from metals to softs. In glittering generalizations, the press associates the bull market with demand from China and India. Perhaps this is because it is the easiest one-liner, requiring the least explanation. However, there are considerable complexities to current commodity price trends that require more than a reference to China or India. In particular, the potential squeezes in markets like silver, palladium, and platinum moves have less to do with China and more to do with U.S. and European developments.

From the beginning, Fed Chairman Bernanke made his second "debut" before lawmakers to explain his policy and the state of our economy. He offered the perception if "transparency" according to The Wall Street Journal front page today. In keeping with his predecessor, Bernanke suggested that further rate hikes might be required to keep inflation in check. The consensus is that this is a status quo statement that means rates will move to 5% before any policy change is considered. Yet, there is a growing number of analysts that believe Bernanke is likely to moderate rate increases. In particular, a further weakening in real estate represents a trigger for policy change.

It is this limited possibility that has stimulated further interest in commodities. If the world is in the grips of a 1970's style inflation, prices for standard inflation hedges like silver and gold can easily reach and exceed their 1979 all time records. Platinum and palladium have already raised the bar from the "go-go" years of precious metals with palladium reaching $1,075/ounce and platinum touching new records as I write.

Recall that the 1970's inflationary spiral began with agricultural sectors as grains responded to the 1970 corn leaf blight and progressed with the decimation of the Peruvian fish meal (El Nino) and the failure of the Russian winter wheat crop. This spawned the infamous Russian Wheat Deal and subsequent price rockets in wheat, corn, soybeans, and oats.

The grain surge was immediately followed by the oil embargo. In turn, rising energy prices pulled the rest of the economy along for a protracted inflation, stagflation, and a confidence crisis. For those who remember, President Nixon imposed price controls to stem the greenback's deterioration. He was forced to close the U.S. gold window to halt a raid on U.S. supplies. When U.S. gold ownership was legalized in 1975, consumers were already numb from the energy crisis, high foods costs, labor dissatisfaction and unrest, 63¢ sugar, and no end for the dull economy in sight. Coffee inflated after the Brazilian freeze in 1975. In 1976 into 1977, meat prices made new highs and Congress was asked to investigate. The entire wave of commodity inflation culminated Bunker Hunt's plan to return to a metallic monetary system when he attempted to corner the silver market.

The tumultuous 1970's were followed by a decade of adjustment. The 1980's were a response to the 1970's. We saw the creation of financial derivative like Ginnie Mea futures, T-bonds, and T-bills to combat growing price volatility risks. The Fed embarked upon a concerted anti-inflation campaign that took interest rates to the highest levels. Restrictive monetary policy was blamed for the crash of '87. The complexion of financial markets was forever changed as the breadth and scope of participation expanded with explosive growth in retirement accounts and other fiduciary funds. Even individual participation by "the average Joe" altered market behavior and dynamics. The little guy began to count...and still does.

I reiterate this exceptionally condensed history because history repeats. While we have not experienced the same exact sequence of events as in the 1970's, parallels are unmistakable. Absent an oil embar

Mick100
06-04-2006, 02:03 PM
Bloomberg News

E-Mail This Story Printer-Friendly Format











Copper, Zinc Rise to Records as Funds Buy on Stockpile Decline
April 5 (Bloomberg) -- Copper rose to a record, leading a rally in aluminum, nickel and tin, as declining supplies led investment funds to increase purchases of the metal. Zinc also climbed to an all-time high.

Strikers at Grupo Mexico SA have shut the Latin American country's second-biggest copper mine at a time when inventories have plunged to their lowest in more than a month. The amount of money in index-linked commodity funds will rise 38 percent this year to $140 billion, according to Barclays Capital.

``Most funds are long in base metals,'' Stephan Wrobel, chief executive officer of Diapason Commodities, who oversees about $3 billion in assets, said in an interview in London. ``The supply and demand dynamics of copper still have a long way to go.''

Copper for delivery in three months on the LME rose as much as $137.30, or 2.5 percent, to $5,686.30 a metric ton, beating the previous record set April 3 by $69.30. It was at $5,670 at 4:56 p.m. in London. Copper has risen in five of the past six weeks, taking its gain this year to 29 percent.

Copper inventory tracked by the London Metal Exchange fell for a third consecutive day, dropping 2 percent to 113,925 metric tons, the LME said in a daily report. Stockpiles are equal to less than three days of global usage.

No new talks have been arranged between management and miners at Grupo Mexico's La Caridad mine to resolve the stoppage that began March 24, company spokesman Juan Rebolledo said today. The strikers don't belong to a government-recognized union, he said, adding that he expects authorities to reopen La Caridad's concentrator by the end of the week.

On the Comex division of the New York Mercantile Exchange, copper for May delivery jumped as much as 5.90 cents, or 2.3 percent, to a contract-high of $2.5945 a pound.

`Rally Not Over'

Bullish metals forecasts are prompting investors such as pension funds and hedge funds to place more money in funds that track commodity indexes.

``There are no signs that funds have lost appetite,'' said Angus MacMillan, a metals analyst at Bache Financial Ltd. in London. ``As long as you have a list of problems, funds will keep piling in.''

Copper prices may keep gaining as strikes by miners demanding a larger share of rising profits curb production, Credit Suisse, Switzerland's second-largest bank, said today. The metal will average $2.17 a pound this year, 21 percent more than its previous prediction, the bank said.

``The three-year rally in the metals is not over,'' said Credit Suisse analysts led by David Gagliano in New York.

Demand for copper, which is used to make wiring and plumbing, will rise 5.1 percent this year to 17.8 million tons, beating production by 100,000 tons, the analysts said.

Mine Expansion

``The trend over the next 10 to 15 years should be bullish for commodities,'' Daniel R. DiMicco, chief executive officer of U.S. steel producer Nucor Corp., said in an interview from Nucor's headquarters in Charlotte, North Carolina today. ``There will be ups and downs during that period, but the downs won't be as severe as they have been in the prior 20 years.''

Copper's rally has encouraged companies including BHP Billiton, the world's largest miner, to increase production. The Melbourne-based company may spend $5 billion to double output at its Olympic Dam mine in Australia, it said today. The expansion would be BHP Billiton's most expensive project.

Zinc rose $93.50 to $2,781 a ton. Earlier, it gained as much as $114, or 4.2 percent, to $2,801.50 on a ton on the LME.

Zinc inventory has dropped 30 percent this year to 276,325 tons. Credit Suisse forecasts demand for the metal, which is used to galvanize steel, will exceed production this year by 466,000 tons.

Other metals rose on the LME. Aluminum gained $45 to $2,508 a ton. Nickel increased $575 to $16,450 and lead climbed $1 to $1,1

Mick100
09-04-2006, 12:46 AM
Some interesting scraps of info on oil

Joseph Dancy

http://www.financialsense.com/fsu/editorials/dancy/2006/0407.html
.

moe
10-04-2006, 10:41 PM
Lately everytime i pick up a newspaper,switch on the tv or even jump onto forums and hear/read about commodities i can not help but be reminded about the hysteria that surrounded dot com stocks in the late 90s and early this turn of the century.

Everyone is going bonkers over them! Dont get me wrong i own shares myself in a couple of the big players and have smaller amounts in a few speculative plays (which i can afford to lose, god forbid), but am now beginning to read and hear about average "mums and dads" plowing into cheap mining/exploration companies that have and may never extract a grain from the earth ever.

My point being, there seems to be the case arising that people are purely buying into mining stocks for fear of missing out of the new best thing since slice bread, without fully understanding of what they are getting themselves into. They have no idea about the operations that these companies undertake and the risk that come with them.Just like the dot com boom.

Is it fair to make a possible comparision between the two? Just thought i would get some banter going...

trader10
10-04-2006, 11:17 PM
Investors choose profit

Michael Quinn
Monday, April 10, 2006

METAL prices remained at high levels but after recent weeks of buying frenzy, equity investors paused for breath today, with concerns over US interest rates and the shorter business week ahead cited as other possible reasons for the profit-taking.

Of the big guns, Oxiana had yet another positive day, with managing director Owen Hegarty and the management team at the Melbourne-based miner evidently unable to put a foot wrong. Oxiana's main metals of copper and zinc are fetching record prices, while even its lesser lights of gold and silver are trading at more than 20-year highs. The company's non-hedging policy looks pure genius.

Overall, a clutch of juniors showed there was still heat in the uranium sector, with Bullion Minerals the standout as investors pushed the stock up more than 40% on news and appointments associated with its morph into Uranium Equities.

As well as Canadian company Laramide Resources expressing an interest in taking an equity stake in Uranium Equities – Canadian company Mega Uranium's recent takeover of another uranium junior Hindmarsh Resources is the sort of template investors would like – Bullion said it had secured the services of two experienced geologists and one experienced uranium chemical/metallurgical engineer.

Bullion also said it was "formalising Mark Chalmers' long-term working relationship with International Nuclear Inc (iNi), an independent consulting organisation based in Golden, Colorado focused on the front end of the nuclear fuel cycle".

Chalmers, formerly a "key" manager at the Beverley uranium mine will be managing director at Uranium Equities, while David Brunt, also previously of Beverley fame, will be an executive director.

Berkeley Resources was another new uranium explorer with a Canadian tinge attracting investor interest today as it rose 26% on the back of its strategic alliance with French nuclear heavyweight Areva. This Areva deal presumably made sense to Canadian outfit Dundee, which told the ASX on Friday it now owns 6.9% of the junior.

One of last week's favourites, Uranex, completed the trifecta for uranium juniors (up 23.1%), while elsewhere Tawana Resources had a turnaround of sorts as its shares rose 20% to 36c following a horrendous downturn in market fortunes over the past year.

Once upon a time back in 2004, the diamond explorer saw its shares fetching over $2, but it's been a precipitous fall since as the costly, difficult and time-consuming hunt for sparklers has wreaked havoc with the patience of investors.


http://www.miningnews.net/storyview.asp?storyid=57035§ionsource=s0

T10 [8D] GO TORO GO ! :D

trader10
10-04-2006, 11:21 PM
http://www.miningnews.net/premiumarea.asp

500 year-old lessons in mining management


Monday, April 10, 2006

BUSINESS challenges that we face in the mining world today are seldom new. Allan Trench* suggests that mining companies can learn from past experiences, even those nearly 500 years old!


Originally published in 1556, Agricola's De Re Metallica represents the first book on mining to adopt a scientific approach based on field research and observations. It stands out as a classic text to the present day. It is therefore insightful to revisit the book to ascertain what Agricola had to say regarding the management and ownership of mines.

Three lessons from De Re Metallica stand as true today as in the 16th century. Firstly, on mine management (described by Agricola in the role of the mine owner), he recognised the importance of gathering first-hand facts regarding the performance of a mine.

Agricola stated: "It is important that the owner who is diligent in increasing his wealth should frequently himself descend into the mine, and devote some time to the study of the nature of the veins and stringers, and should observe and consider all the methods of working, both inside and outside the mine."

Do you agree? I suspect so. But ask yourself when was the last time the senior decision-makers in your company spoke directly with and visited those workers facing the production challenges at the frontline?

Secondly, Agricola recognised the importance of frontline morale to the success of a mining venture. His words were "…sometimes he (the owner) should undertake actual labour, not thereby demeaning himself, but in order to encourage his workmen by his own diligence…"

Do you agree? I suspect so. But ask yourself the above question once again! Was it today that the senior management and/or directors visited the frontline? Was it yesterday? Last week? Last month? Last year?

On mine ownership, Agricola arguably pre-empted Markowitz' (1952) Nobel prize-winning portfolio theory of ownership and investment returns by almost 400 years. He stated: When one man alone meets the expense for a long time of a whole mine, if good fortune bestows on him a vein abundant in metals, or in other products, he becomes very wealthy.

If, on the contrary, the mine is poor and barren, in time he will lose everything that he has expended on it. But the man who, in common with others, has laid out his money on several mines in a region renowned for its wealth of metals, rarely spends it in vain, for fortune usually responds to his hopes in part.

In these heady times when many companies are reaping great financial benefits from a resources boom that has reached parts of the Periodic Table that previously only chemists knew of, the third lesson from Agricola also stands true today. Ask yourself whether your company has all its 'eggs' in one commodity basket? After all, commodity prices can still fall too. Can't they?

*Allan Trench is Adjunct Professor of Mine Management & Mineral Economics, Western Australian School of Mines and is a non-executive director of Heron Resources, Navigator Resources and Pioneer Nickel.


http://www.miningnews.net/premiumarea.asp

T10 [8D]

Mick100
10-04-2006, 11:40 PM
quote:Originally posted by moe

Lately everytime i pick up a newspaper,switch on the tv or even jump onto forums and hear/read about commodities i can not help but be reminded about the hysteria that surrounded dot com stocks in the late 90s and early this turn of the century.

Everyone is going bonkers over them! Dont get me wrong i own shares myself in a couple of the big players and have smaller amounts in a few speculative plays (which i can afford to lose, god forbid), but am now beginning to read and hear about average "mums and dads" plowing into cheap mining/exploration companies that have and may never extract a grain from the earth ever.

My point being, there seems to be the case arising that people are purely buying into mining stocks for fear of missing out of the new best thing since slice bread, without fully understanding of what they are getting themselves into. They have no idea about the operations that these companies undertake and the risk that come with them.Just like the dot com boom.

Is it fair to make a possible comparision between the two? Just thought i would get some banter going...






I don't take much notice of main stream media but I do buy a newspaper once a week and watch the news on TV ocassionally. Unless I'm missing something here I have to say that I havn't seen much of anything that I would consider "hype" about commodities apart from the rising oil price ocassionally getting a mention on the news.

In my opinion there are very few people even aware that there is a bull market in commodities leave alone investing in speculative shares. To be honest I know of only a few people in real life who is playing this commodities bull. Sounds as though I must be living a very sheltered life.
,